vs Buying at Houston Ford
Which is better? The answer
is….drumroll please….it depends! The answer depends on the
specifics of each individual situation. Leasing and buying are
simply two different ways of auto financing. Leasing finances the
use of a vehicle, but only the portion of it you will use, and buying
finances the whole thing.
When you buy, you pay for the entire
cost of the vehicle, regardless of how many miles you put on. The
vehicle is all yours after you have paid off your loan. How much
equity you have in your vehicle when it is paid off depends on how
long it took you to pay it off, how many miles you put on during that
time, and current market values when it is paid off.
When you lease, you only pay a portion
of the vehicle’s cost, which is the part that you “use up”
during the time you are driving it. Your lease is determined by many
factors, such as how many miles per year you drive, how long you
want to lease it, the residual value (the value of the vehicle at the
end of the lease), and cash investment.
Pro’s of Buying
You will have the opportunity to own
your vehicle. Once your loan is paid off, it is all yours. The
amount of miles you drive is not a factor. If your lifestyle
changes, and you cut down on the miles you drive per year, your
vehicle will be worth more when it is paid off. If you start driving
significantly more miles per year, you won’t be penalized for them,
other than your vehicle’s value will be less when it’s paid off.
You can also customize your vehicle however you want. Do you want to
put some fancy rims on it? Go for it!
Con’s of Buying
Since you have to buy the whole thing,
buying typically requires a longer term loan than a lease to make the
payments affordable. It is no secret that vehicles depreciate. If
you have a long term loan, you can run into a situation during the
loan where you owe more on the vehicle than it is worth. You also
will most likely be driving the vehicle for a period of time after
the manufacture’s warranty has expired, which can leave you
responsible for the cost of unexpected repairs.
Pro’s of Leasing
Leasing often does not require a down
payment. All you usually need to pay is the first month’s payment,
taxes and other fees. When your lease it done, you have three
options: First, you can buy the vehicle for the residual value.
Second, if the market value is higher than your residual value, you
can trade it in or sell it and keep the profit. Third, if it is not
worth your residual value, you can simply hand in the keys! You will
never have to worry about owing more than it is worth. You will
likely be driving the vehicle while it is under manufacture’s
warranty the entire duration of the lease. If you love driving a
newer vehicle, you can do so every couple of years, depending on how
long you lease your vehicles. You will also most likely turn in your
vehicle before it ever needs new brakes or tires.
Which is best for you?
All of us have different lifestyles and
priorities. What is right for one person might not be right for
another. The great thing about doing business at Houston Ford is
that we will take the time to get to know you, assess your needs, and
help you figure out what options work best for you. If you have any
questions, feel free to e-mail me at email@example.com