Leasing vs. Financing

Leasing vs. Financing a New Vehicle at Stanley CDJR Brownwood

It can be tough to compare a 6-year loan and a normal 3-year lease, it basically boils down to what your specific needs are. A lease can also be "subvented," or made more affordable. The automaker can either take money off the top with a special lease discount, it can raise the residual, or can do both whereas a loan can take much longer to pay off while still driving an older model vehicle. Certain rebates may also be available for leases that may not be available for loans.  Are you in the Brownwood, Coleman, or Comanche areas and would like to know more about leasing or financing a new or used vehicle, visit us at Stanley CDJR Brownwood today and see what we can do for you!

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Leasing Upside

At first glance, leasing may seem like the more appealing option when it comes to getting a new vehicle. Your monthly payments are usually not as expensive because you are not repaying any principal as you would on a loan. Instead, you'll borrow and return the difference between the car's new and residual values, plus finance charges, at the conclusion of the lease.

Leasing and Loans

If you are taking into account the big picture, the most affordable way to drive a vehicle is to buy it outright and use it until it is no longer economically feasible to keep up with repairs. This way you get the absolute most use and therefore value out of your vehicle. If you are simply leasing, you will be making monthly payments forever, whereas when you buy a car, you will eventually own it and will no longer have to pay a monthly bill. Most leases also set a certain number of miles that you can travel before incurring fees, which once again is no issue when you buy a vehicle.

Issues with Leasing

• You may be held financially responsible for expendable items such as tires or carpets if used or damaged.
• There may be unexpected fees when you return the vehicle.
• You are expected to bring the vehicle back in near pristine condition or you will be penalized with fees.
• You can be hit with extremely large cancellation fees if you decide to break your lease early.

Leases vs. Loans

When it comes to ownership, when you buy a vehicle you will eventually own it outright and will no longer have to make payments, whereas if you lease, you will never own the vehicle and will eventually have to return it when the lease is up. Loans generally have a higher monthly payment than leases because you are paying off the entire cost of the car plus other fees. Leased can have a lower monthly rate because you are paying towards the depreciation, not the overall cost of the vehicle. When you are paying on a loan, there is no need to worry about wear and tear or kids or passengers making a mess or causing minor damages. In a leased car you must keep a very close eye on the amount of wear and tear that is happening in the vehicle.