A Guide to Leasing Versus Financing a Vehicle: Everything You Need to Know

August 27th, 2022 by

Are you getting a new vehicle in Cherry Hill? Deciding whether to purchase or lease a car can be difficult. Read this guide to help you determine if buying or leasing is best for you.

Should You Take Out a Car Loan?

With car ownership, you can drive and own the vehicle at the end of your loan term. To buy the car, you have to borrow money from a lending institution and make monthly payments for a certain number of years plus interest. Your up-front costs will include registration fees, taxes, down payment and other car fees. Compared to leasing the vehicle, your monthly payments will be higher as you’ll be paying for the car’s entire price plus finance charges and interest.

The good thing about purchasing a car is that you can customize or modify it as you like. But check with the manufacturer first as some modifications may void the warranty. You can sell the vehicle after full payment or trade it in to pay off your balance. Car owners also have fewer restrictions regarding mileage. You can also build equity, which you can use if you intend to get another vehicle.

While owning a car is exciting, it might not always be a good idea. It can be really expensive to own a car and long-term loans even cost more. Also, you will need a bigger downpayment and will have to take care of maintenance costs which can expensive.

Is Leasing a Car the Best Route?

Leasing a car can be the most cost-effective option because the monthly payments are usually lower. However, you’ll have to return the car at the of your term. A few of its advantages include not worrying about fluctuations and the hassle of finding a new buyer should you decide to sell. A leased car is usually also trouble-free and may come with free oil changes.

It’s possible to drive a luxury vehicle when leasing a car. But you have to make sure to properly care for it and not do any modifications. Otherwise, you will have to pay additional charges. Also, there is a termination fee if you decide to return it. As to mileage, you’re only usually allowed up to 12,000 miles per year.

Which Option Is Best For You?

If you want to have full control of your car without worrying about restrictions in mileage, buying may be the best option. For those who want to go this route, make sure to properly maintain it to avoid lowering your vehicle’s resale or trade-in value.

Leasing a car may be what you need if you want the affordable option and you’re planning to drive a new car every few years. It’s also ideal for those who want to drive a luxury car because leasing is more financially manageable.

If you’re looking for a brand-new or pre-owned Land Rover in Cherry Hill, please contact us at your earliest convenience. We are more than happy to assist.

Posted in Finance