Buying vs. leasing is an age-old question that doesn’t necessarily have a definitive answer. However, we at Patrick Volvo Cars understand that these two options can be quite confusing for consumers. In our latest blog we have outlined the major characteristics and differences between buying and leasing a car, to make your decision easier and more informed.
Leasing
Leasing a vehicle is essentially renting the vehicle. Upfront costs are typically much less when you lease a car. In addition, your monthly payments are usually less with a lease than with buying a car. At the end of your lease term, you can return the vehicle and lease another one. You also have the option of buying a vehicle or buying the vehicle that you had been leasing.
If you choose to lease a car you are afforded the ability to try out and use the latest in vehicle technology as you are only behind the wheel of a vehicle every few years. Leasing a car also allows you to be covered by the vehicle’s factory warranty for the entire life of the lease. Additionally, trading in a vehicle at the end of a vehicle lease is quite simple. You won’t have to haggle over the value of the car as the car’s residual value is set at the beginning of the lease and will not change at the end of the contract.
However, leasing a car means that you do not own the vehicle. This means that the leasing company can set various restrictions on the car. On of these restrictions include a mileage limit imposed on the vehicle. This means that you have an allotted amount of miles that you can drive the vehicle, and if you go over that limit, you may be subjected to overage fees. Leasing a car also means that you cannot customize your car like you would if you buy it; this is because all cars must be brought back to the dealership in the condition that it was when you bought it.
Buying
Buying a car has the inherit benefit that you own the car itself and don’t have to worry about things such as mileage limits or not being allowed to fully customize the car itself. Additionally, you won’t have to make payments when the loan to your car is paid off.
Financing/buying a car is typically a much easier and less complex method to owning a vehicle than leasing is, because many lenders are open to offer loans to those with less-than-optimal credit. Additionally, another benefit to buying a car is that you build equity as you pay off your loan. This money can eventually be used towards a purchase of a new car.
Buying a car does present its own set of unique challenges, however. These challenges include that buying a car is more expensive in the short term as your monthly car payments are almost always more expensive than monthly lease payments. You also may have to pay more sales tax on the vehicle itself and, ultimately, your car’s future value is unknown. Compared to a lease where the amount the vehicle will be worth at lease-end is declared in the lease contract before the lease ever begins.
What to do?
Choosing whether or not to lease or buy a car depends on a variety of personal factors. Leasing allows you to get more car for less money, since you only pay for the value of the vehicle that you drive instead of paying for the entire value. On the other hand, buying gives you the freedom of complete ownership and the ability to pay off the vehicle and build up credit.
No matter your choice, our sales team at Patrick Volvo Cars can help you. Feel free to check out our inventory or come see us at 1600 E Higgins Road to help make your decision easier.
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