Detect the Differences of Buying Versus Leasing
When car shopping there is a question that permanently runs through the shoppers’ goes: Should I buy or lease this car?
That is followed by another question:Which one would benefit me more?
In order to help you better determine which is the best for you when looking at fresh or used cars, let’s take a look at the differences inbetween buying vs. leasing. Since there are two sides to each, this will cover the positives and the negatives of both.
Buying Vs. Leasing – Positives
Buying
The car is yours. After you finish off payments you can officially say that the car is yours. Any money you make off of a resale of that car goes directly to you. Also, you will get to keep that car for as long as you want to.
Switching the car is possible. Once you have the title to the car, then you can do what you want with it. Your car can get a fresh paint job, add bumper stickers, switch interior, or alter the engine when you own it.
Mileage confinements do not exist. When you buy a car there is no maximum amount of miles you are permitted to drive. You can as far as you want, as little as you want, or anywhere in inbetween.
Leasing
Upgrade after a duo years. After your lease is up, you can trade in your car for a newer model. After three years, the typical length of a lease, you can trade your car in for one with more features and enlargened technology.
Down payments tend to be less. For leasing there are typically deals running that get you a fresh vehicle for $0 down. This helps for people who need a car a little quicker and are in a tie. You typically pay anywhere from $0 to a few thousand for a down payment. Just reminisce that the less you pay, the more you pay each month.
Buying Vs. Leasing – Negatives
Buying
Warranties run out. After a certain amount of time warranties will run out. When you lease a car you often only lease the car during the bumper-to-bumper warranty and don’t have to worry about that.
Loans can last longer. If you don’t do a 3-year loan, which is the typical lease rate, then you will be paying interest rates for a longer period of time. These rates will accumulate over the extra years and lead to a higher price of the vehicle.
Down payments are often higher than for used cars. When purchasing a fresh vehicle auto loan lenders look for harshly 10-20% for a down payment. When you buy used cars there is a chance to have a down payment of $0.
Leasing
You’re basically just renting. Leasing a vehicle is basically the same as renting an apartment. You pay to have it each month, you maintain it, attempt not to wear it down to much, and then you give it back without earning any equity.
Credit score truly matters. According to US News & World Report, “Another potential downside to leasing is that usually only shoppers with good credit scores will qualify for a car lease. If your credit score is less than flawless, you may want to consider buying a used car or waiting to lease until you can clean your credit up and increase your credit score.”
Whether you determine to lease or buy a car, Vann York Honda is here to help. Stop by one of our locations in Kernersville, Greensboro, or Winston-Salem to get the best deals on purchasing or leasing one of our fresh or used cars.
[Two] two thousand sixteen Models – Based on two thousand sixteen EPA mileage ratings. Use for comparison purposes only. Your mileage will vary depending on how you drive and maintain your vehicle, driving conditions and other factors.
[Three] two thousand sixteen Models – Hybrid: Based on two thousand sixteen EPA mileage ratings. Use for comparison purposes only. Your mileage will vary depending on driving conditions, how you drive and maintain your vehicle, battery-pack age/condition, and other factors.
[Four] two thousand seventeen Models – Based on two thousand seventeen EPA mileage ratings. Use for comparison purposes only. Your mileage will vary depending on how you drive and maintain your vehicle, driving conditions and other factors.
[Five] two thousand seventeen Models – Hybrid: Based on two thousand seventeen EPA mileage ratings. Use for comparison purposes only. Your mileage will vary depending on driving conditions, how you drive and maintain your vehicle, battery-pack age/condition, and other factors.
[6] NHTSA Government 5-Star Safety Ratings are part of the U.S. Department of Transportations Fresh Car Assessment Program (www.safercar.gov). Model tested with standard side airbags (SAB).
[7] For more information, visit Kelley Blue Book’s KBB.com. Kelley Blue Book is a registered trademark of Kelley Blue Book Co., Inc.
[8] View U.S. News Best Cars at http://www.usnews.com/cars.
[9] Car and Driver, January 2017. Two thousand seventeen CR-V won compact SUV category. Two thousand seventeen Ridgeline won mid-size pick-up.
[Ten] Based on two thousand sixteen EPA mileage ratings. Use for comparison purposes only. Your mileage will vary depending on how you drive and maintain your vehicle, driving conditions and other factors. For more information see GreenCarJournal.com
[11] two thousand seventeen IIHS Top Safety Pick+ with Honda Sensing™ and specific headlights.
[12] two thousand seventeen IIHS Top Safety Pick with Honda Sensing™
[13] Virtual Inventory, Available Configurations and In-Transit inventory contains vehicles that have not actually been manufactured. These vehicles display consumers sample vehicles that may be available. Pricing, Options, Color and other data pertaining to these vehicles are provided for example only. All information pertaining to these vehicles should be independently verified through the dealer.
[14] Some vehicles may have dealer installed options that are not included in the price.
Buying Vs
The Disadvantages Of Leasing A Car
Posted six years ago
Have you ever seen someone who was always driving a fresh car almost every other month it seemed? I reminisce, right after I graduated college, I had a few friends like that and always wondered where they got the money to get into the “flipping” cars game. They would have the newest of the newest models of the most popular cars. Meantime, here I was driving my ten year old Honda Accord with over 100,000 miles, an air conditioning system that only blew hot air, a driver side window that wouldn’t roll all the way down, a passenger side door that you could only open from the outside unless you knew magic mechanism to operate the violated treat, and at times I had to literally shove it and leap in just to get it commenced. I didn’t get as many chicks as the others with the “phat” rails got…I wonder why?
As I got older and spotted that many of those who were in the “flipping” car game were still living at home with their mothers because they couldn’t afford to stir out. On the other arm, I was operating my own company while living on my own in Fresh York City. They were leasing their cars while I had possessed mine outright. When it came time to investing in my fresh business, that lack of a car note made a meaty difference…thank God I had saved! There is a meaty difference inbetween leasing and wielding your own car and since I am a strong advocate of the “ownership” mindset let me explain to you the advantages of possessing your car as opposed to leasing it.
When you lease a car the two main charges are a depreciation charge and a finance charge. The depreciation charge is the price that the vehicle has gone down while you were using the vehicle. The finance charge is the interest rate that you are paying on the term of the lease. Nothing is going towards anything of real value to you. Depreciation is only an accounting expense that just so happens to be the most costly in the earliest years of the vehicle, which just so happens to be the time that you are leasing the vehicle.
Cars depreciate 25% as soon as you drive them off of the lot. If you purchased a car for $20,000, as soon as you drive it off the lot it is only worth $15,000. This is why those millionaires who truly understand the value of a dollar will purchase a pre-owned vehicle (1-3 years old) that has already taken its thickest hit of depreciation. This is why you will never hear of them leasing a vehicle because they understand the value in ownership and renting.
I am not telling that there are no benefits to leasing a vehicle. If you lease a car you will very likely have lower monthly payments, they require little to no down payment upfront, you are never in a position when you owe more than what the car is worth, and if you are business possessor you may be able to get some tax advantages if you use the car for business purposes. I get it.
However, most people who lease vehicles go for years of always having a car payment and not having anything to showcase for it but a lower savings account. Depending upon the type of lease that you have when your lease term is up you either arm the keys over to the dealership and lease another vehicle, or you finance the remaining value of your car to work towards possessing it and go from lease payments to loan payments. The deal that you thought you’d get if you determine to purchase the vehicle after your lease contract is up is never as good as you would have thought it would be. This is because in a lease the most expensive portion of the payment that you are paying for is the high depreciation expense and very little if nothing towards the value of the vehicle.
Other disadvantages of leasing are as goes after:
• Terminating the lease can be very costly
• You don’t own the vehicle so you cannot make any major switches to the car, paint it, or add equipment to it.
• Mileage confinements and putting too many miles on the car can be very costly if you go over the permitted limit.
• Insurers usually charge higher coverage costs for leased vehicles (their reasoning: if you don’t own the car you are less likely to take good care of the car than someone who does own the car).
When you lease a car you are essentially committing to a lifestyle of renting your car which ensures you will always have a car note. Wouldn’t it be nice to purchase your brand fresh Toyota with a five year note, pay it off in three years, and in save up the amount you would have been paying towards a car note for the final two years into your savings account? Little tactics like this over a lifetime add up towards a fruitful retirement where you can love your golden years without having to work for the golden arches. Commence your tomorrow today and let’s shop brainy for that fresh car!
Ryan Mack, Author of Living in the Village and President of Optimum Capital Management, LLC
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