To buy or to lease, that is the question – one that plagues many drivers seeking their next vehicle. Uncertainty can make the process seem complicated and confusing, but our team at South Strand Chrysler Dodge Jeep RAM believes finding a new ride should be fun!
There are several factors to consider when deciding whether to buy or lease, and we’ve detailed them here. Check out our comprehensive guide on leasing vs. buying, including the pros and cons of each. Read on to learn more, then stop by our car dealership in Pawleys Island, SC for a test drive!
What Is the Difference Between Leasing and Buying a Car?
It’s essential to first understand the basics, so let’s get started!
What is Leasing?
Think of leasing a car like renting an apartment, but instead of paying the full price and gaining ownership, you pay a discounted rate for a specific period of time. The price of the lease is calculated by subtracting the expected value of the car at the end of the lease term from the full purchase price.
What is Car Buying and Financing?
Purchasing a new vehicle is still considered the more traditional approach. When buying a new Chrysler, Dodge, Jeep, or RAM, you can pay for the vehicle in full or take out a car loan to be paid back in monthly installments.
At South Strand CDJR, we strive to make the car-buying process as simple and stress-free as possible. Once you’ve found your dream car, our in-house Finance Department will assess your financial situation before customizing a payment plan that works with your budget.
Leasing vs. Buying: Pros and Cons
As is often the case, there are advantages and challenges to each option. In the end, the choice to buy or lease will come down to your overall priorities and budget. Here are some of the pros and cons when it comes to leasing or buying a new vehicle:
Pros of Leasing a Vehicle
- More affordable monthly payments
- Lower (or possibly no) down payment
- Decreased maintenance costs
- No financial loss as the vehicle depreciates
- Updated technology available every few years
- Trading in a leased vehicle is an easy process
Cons of Leasing a Vehicle
However, leasing a vehicle can come with some drawbacks. The payments made on your vehicle are not going towards ownership of any kind, and upon return of the vehicle, you may be shocked by end-of-lease costs and additional fees.
Other cons of leasing a vehicle include:
- No customization options available
- Mileage limits and other possible restrictions
- Certain requirements must be met on the shape of the vehicle upon return
Pros of Buying/Financing a Vehicle
Depending on your budget and priorities, owning your new ride may be a wise financial move. Some of the benefits of buying or financing a vehicle include:
- Payments lead to ownership
- Absence of payments after loan is paid off
- Freedom to customize
- Ability to sell on your own timeline
Cons of Buying/Financing a Vehicle
But it’s important to take these aspects into consideration too. From the upfront expense to depreciation concerns, here are some drawbacks to buying a car:
- More expensive in the short-term
- Higher interest rates and and sales tax
- Larger down payment often required
- The future value of the car is unknown
Five Questions to Ask Yourself Before Making a Decision
Even after gathering the facts, you may still have a tough time making a choice. We understand! Choosing the ride that’s right for you is no easy feat, especially on a tight budget.
That’s why we’ve compiled a list of questions to ask yourself to help determine if leasing or buying is the right choice for you.
- How Much Am I Willing to Spend Each Month?
Leasing is often more affordable, allowing you to drive a brand-new ride for less. Since you only pay for the depreciation, leasing is often a good alternative for buyers on a budget.
Ask yourself and try to factor a car payment into your budget to determine how much you want–and are willing–to spend.
- How Long Do I Want to Make Car Payments?
The beauty of buying a vehicle is that, at some point, the payments will end and the car will be all yours. If you perpetually lease vehicles though, you will always have monthly car payments.
- Is My Car’s Primary Purpose Business or Pleasure?
If you lease a vehicle that is primarily used for business purposes, you may be eligible to write off your monthly payments or mileage as a tax deduction. Consult a tax professional to see if this may be an option for you.
- How Far Do I Typically Drive?
For some drivers who log a lot of miles behind the wheel, mileage restrictions may be a deterrent from leasing. The standard lease contract allows for between 10,000 and 12,000 miles a year.
Upon returning the vehicle, if you have driven over your allotted miles, you will face a charge for each additional mile. That said, if you enjoy long-distance road trips or have to make constant treks out-of-state for work, you may be better off purchasing a vehicle than leasing it.
- How Much Am I Willing to Pay Upfront?
Purchasing a new car often requires a significant down payment or higher monthly payments. If you’re unable to designate enough funds toward a down payment, leasing may be a great alternative. Depending on your credit score, you can start a lease with no down payment and still have lower monthly payments for the exact same vehicle.
Lease or Buy? We’ve Got You Covered at South Strand CDJR!
Whether you’re looking for a lease you’ll love or you’re ready to make a long-term investment, we’ve got you covered at South Strand Chrysler Dodge Jeep RAM!
As locals’ trusted dealership in Pawleys Island, we understand that choosing the right new ride can seem overwhelming. But it doesn’t have to be! Our team will be by your side each step of the way, offering special savings to make our already low prices even more affordable. Be sure to ask about available Jeep, Dodge, RAM and Chrysler incentives, including Dodge finance offers and more!
Here at our on-site Auto Finance Center, it’s our mission to help you find the best car for you – your lifestyle and your budget. Check out Dodge specials, new Jeep incentives, Chrysler finance specials, and more!
We aim to make your dream car a reality, so come see us today for a test drive!