Automobile leasing is the ultimate way to experience a brand new vehicle without having to commit to owning it for years down the road. If you are looking for a flexible way of driving a car and the ability to have a brand new car every couple of years, leasing is the way to go.
New Car Leasing Vs. Buying – The Great Debate
Figuring out if it is better to lease a new vehicle or buy it is the topic of much debate. The answer to the question is not clear-cut. It simply depends on what you are looking for.
When you buy a vehicle you are in it for the long haul. You are making a major commitment and are essentially saying this will be your vehicle for the next 8 to 10 years. Buying a new car or truck leads to higher monthly payments, however, once you have paid off the full price of the vehicle it is yours, you completely own it.
Say you buy a new $28,000 vehicle. What will follow is you having to set up some sort of financing arrangement and over the course of the next few years you will be making monthly payments that chip away at that $28,000. Once the $28,000 balance is paid off that’s it; you own the vehicle and the only payments you have to make associated with it is for car insurance and any regular maintenance and repairs that come up.
Leasing provides you with lower monthly payments and less of a commitment. The most common leasing terms last 24 to 36 months, which means you are only driving this new vehicle for 2-3 years. With leases, once the lease term is up you can return the vehicle to the dealership, or if you like the vehicle you can buy it at that point.
Lease prices are lower because you are not paying off the entire price of the new car or truck. Lease payments reflect the difference in price between the purchase price and the resale value the vehicle has at the end of your lease term.
Consider the same $28,000 vehicle. You set up a leasing agreement for 24 months and over the period of those 24 months the new vehicle depreciates $5,000. This means that the resale value of the vehicle will be $23,000. When you took the new car or truck from the dealership it was worth $28,000 and now upon returning it, it is worth $23,000 and that is how much the dealership will be able to resell it for. Thus, you are responsible for paying that $5,000 difference to the dealership. Your lease price will be $5,000 plus normal taxes and fees.
Request a free, no obligation lease price quote to get extensive pricing information on any make and model, as well as special incentive offers. Your free lease price quote will prepare you for your visit to the dealership and will give you an exact idea on what you should look to pay for your new lease.
