Getting a new car is a big financial decision. We get asked a lot here at Salt Lake Valley Chrysler Dodge Jeep RAM if it’s better to lease a new car or finance. The truth is, it’s all about your own personal preference.
To help make your car buying experience easier, we’ve broken down the benefits and drawbacks of both leasing and financing so you can choose which option best suits you!
Leasing a vehicle
One benefit of leasing a new car is that you won’t necessarily have to pay a large down payment so if you don’t have a lot of money saved up right now leasing can be a good option. Some lease offers don’t even require a down payment at all.
When you choose to lease you can get a new car every few years so you’ll always have the latest technology and features. This is the perfect option for those that like to always stay connected and up to date.
Lastly, you don’t have to pay for repairs when you lease. You will have to take care of normal up keep like oil changes, tire rotations and other routine maintenance, but at least you’ll have peace of mind that if something major breaks you aren’t responsible.
If you are a commuter or put a lot of miles on your vehicle, leasing is not for you. When you lease a vehicle your contract will limit the number of miles you can drive. If you go over your allotted yearly mileage you will be required to pay a fee at the end of your lease term per mile you went over. This can be costly and not worth it in the end if you use your vehicle a lot.
Another drawback to leasing a car is that you’re essentially just renting it. You get no equity from the vehicle so when your lease term ends you’ll have to either get a new car with new payments or take out a loan and start the finance process for the vehicle you were leasing.
Financing a vehicle
Did you drive your last vehicle until it was on its last life? If so, purchasing a new car is probably the better option for you. When you choose to finance, after you pay off your loan the car is yours to continue driving for as long as you please with no more payments!
Another benefit to financing a new vehicle is that there are no mileage restrictions. You could drive cross country and back without worrying that you passed your yearly limit.
Depending on your finance rate you might end up paying a lot in interest during the life of your loan. This could mean spending more on a vehicle than it might be worth if you need a long loan term.
Another drawback to purchasing a car is that a sizable down payment is usually needed to get a loan. If you find it difficult to keep money in that savings account, then it might not be feasible to save up enough of a down payment to finance.
The last drawback of purchasing a vehicle is that new cars depreciate greatly over the first few years you drive them. There’s no guarantee that you’ll get the resale value you want if you decide to part ways with your purchase.
It all comes down to your budget and your personal needs when deciding if you should lease or finance a vehicle. We hope this cleared up the process for you, but if not feel free to contact our Finance Center for more information!
If you are in the market for a new car be sure to check out our online inventory and current offers. Or visit us in person at the Salt Lake Valley Chrysler Dodge Jeep RAM dealership in Salt Lake City, UT for a test drive.
Source: Salt Lake Valley CDJR