There's a lot to think about when considering whether to purchase or lease your next vehicle. Consider the following when you're deciding which option best fits your lifestyle, finances and what you're looking for down the road.
First, understand how you plan to use the car. Be clear on the car's purpose and your financial goals, then think about your options:
- How much do you drive?
- Do you drive for business or frequently visit family who live hours away?
- How much do you have for a down payment?
- How long do you like to keep a car?
- What are your other financial goals?
Lease vs. Loan
Stay flexible with a Lease
- You can get a new car with the latest technology every few years hassle-free.
- You may have lower maintenance/repair costs.
- When your lease is over, you can choose between buying the vehicle and trading it in for another.
- You may have a lower down payment because you're only financing the depreciation that occurs during the lease term plus taxes and fees.
- Lease agreements typically have a set number of miles included annually, so it’s important to know your driving habits in order to select the mileage limit that aligns with your driving needs.
Potential ownership with a Loan
- Each payment you make gets you closer to owning your vehicle.
- When the loan is paid off, you own the car outright.
- Unlimited mileage lets you drive where you want, when you want, without worry.
- You enjoy the benefits of the trade-in value, cash value or resale value.
- There are no charges for excessive wear and use, although scratches and dents may lower the trade-in or resale value.
- The vehicle is yours to customize as you please.
When considering whether to buy or lease a vehicle, take time to consider your driving needs and financial goals and carefully weigh the pros and cons for each option.