Leasing vs. Financing

Leasing vs. Financing a New Vehicle at Stanley CDJR Gilmer

It can be a tough decision deciding between deciding to lease or finance your automobile. Our sales professionals at Stanley CDJR Gilmer can help you make the best decision for you possible. A lease offers lower monthly payments and allows you to drive a vehicle that you couldn't otherwise afford, but you'll be stuck into a cycle in which you’ll basically be paying for it forever. Buying entails larger costs, but in the end, you’ll own an asset, that being your vehicle. Leasing may be worth the extra expense if your goal is to have cheap monthly payments and drive a new vehicle every few years with no fuss. Come see us today if you’re around the Gilmer, Longview, or Tyler areas and have more questions about financing or leasing.

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Challenging Comparison

It's tough to compare a six-year loan to a regular three-year lease on a level playing field. The bank borrower still has three years of payments to make after the lease expires, but the lessee will have to find another vehicle or accept the lease's buyout option. In most cases, two three-year leases back-to-back will cost thousands more than buying a car and owning it for the same six-year term, be it with a loan or cash. Even after accounting for planned maintenance and repairs, car buyers save more if they keep the car for another three years, for a total of nine years.

Differences Between Loans and Leases

• Ownership- You will own the vehicle eventually and keep it as long as you like, leasing means you will never own the vehicle.
• Future Value- The vehicle will depreciate eventually but its value is always yours, future value doesn’t mean as much when you are leasing but you won’t have any equity in the vehicle.
• Wear and Tear- If you own the vehicle you don’t have to worry about damaging your vehicle, leases will hold you financially responsible for what they consider excessive wear and tear.
• Customization- If you own your vehicle, you can customize it any way you like. Because you have to return a leased vehicle in salable condition, you can be charged for any modifications the dealership will have to remove or fix.
• Mileage- You can drive as many miles as you like when you own your vehicle, many leases have penalties if you drive over a certain number of miles.

Negotiation is Important to Remember

Many people forget that negotiation is absolutely acceptable when leasing or buying. Just because an agreement is put in front of you, doesn’t mean it’s etched in stone. You can negotiate your lease or loan, but you have to always keep in mind that the best deals are made to people with the best credit scores. So, it’s smart to maintain a good credit score if you want more negotiating power. Even with good credit, some dealerships will be more willing to negotiate than others. Also, keep an eye out for deals that seem too good to be true, often times they are.