Lease vs Finance
Buying versus Leasing a New Vehicle
When it comes to buying or leasing a car the options can be confusing. We want to make the choice easier for you. We have some useful information below to help you make a decision.
When buying a new or used car you are paying for the entirety of the vehicle. Leasing a new or used car means that you pay for only a portion of the vehicle’s cost that is paid during the time you are driving it.
Who Owns The Car When Buying?
The car is yours, whether you are paying for it with cash or getting it financed. When you're financing it you’ll have to meet the stipulations the lender makes, like a certain down payment amount and monthly payments. Not meeting those rules means that they are entitled to repossess the vehicle.
Who Owns The Car When Leasing?
When you are leasing a vehicle, you are paying for the monthly use of it. The financial institution that you are leasing it through actually retains the ownership of the vehicle. This is normally why you would end up paying less per month if you leased a vehicle than if you were to buy the vehicle.
Up-front Costs While Buying
When you're financing it, the bank or institution will request a down payment. This amount can vary depending on the requirements and your credit score. Often, your old vehicle can be used as partial or full down payment towards a new vehicle.
Up-front Costs While Leasing
While leases don't require any type of a down payment, paying more up front can actually lower your monthly rate. When signing a lease, you will normally have to pay is the first month's payment, a security deposit, an acquisition fee and any other state fees and taxes.
Future Value When Buying
Your new vehicle will be worth whatever you are able to sell it for down the road, and that can vary depending on how well you keep up maintenance. Performing the Manufacturer's recommended maintenance can help raise the value!
Future Value When Leasing
Since you do not own the vehicle, you won't end up selling the vehicle. You may have certain mileage limits, or wear and tear guidelines that if you go past those, could end up costing you extra money when you turn the vehicle back into the financial institution.
End of Payments When Buying
Once you have paid off the vehicle and any interest that was agreed upon in your contract, the car is yours! The bank will send you a Lien Release as your proof that you have paid off everything that was owed to them. At this point, you can either sell the vehicle and buy a new one, or keep it for as long as you keep taking care of the vehicle properly.
End of Payments When Leasing
There are multiple avenues that you can take at the end of your lease: The majority of people will simply return the vehicle at the end of the lease. There are people that fall in love with their vehicle that they leased and they may end up buying the vehicle from the company. The third option is to turn your lease in before it ends to get a new car with a brand new lease. Just ask about these options and we can go more in depth to set up the lease as you'd like to!
Best Cars to Buy
This is a question best asked to yourself! There are many different vehicles that fit different lifestyles. While the beginning of this question is somewhat personal, our sales people at Frank Boucher Volkswagen of Janesville can certainly guide you to what would be a good fit for you. Either contact us with the form on the side of the page, or call us at 608-286-2461 and ask for help.
Best Cars to Lease
The best vehicles to lease are those that depreciate the least. The cars that hold their value for longer will have the smaller payments, because the company can recoup more of their money when they end up selling it after you are done with it. Please review the least ratings to see which cars retain their value the best.