Leasing Vs Buying
Shopping for a new car can be one of the most exciting and rewarding times in any car enthusiast’s life. Although you’ve probably spent a lot of time thinking about which features you absolutely need to have or what color you want the new ride to be, one may not have thought about whether you want to buy or lease. This is a pretty important decision, as it can impact how much you’ll spend overall, who is responsible for repairs, and even how far you can drive it in a year.
The key difference between buying and leasing is that when you buy, the lending bank owns the vehicle until you pay off the balance of your loan. When you lease, the bank owns it for the specified terms of the contract, but you may have an opportunity to purchase the car outright when it’s finished. Beyond that, there are some significant ways in which these structures vary that you should be aware of before making a decision.
If you want to own the new vehicle for the long-term, for example, you should know that paying for any repairs or maintenance will be your sole responsibility after the warranty expires. A lease, on the other hand, may cover most services for its duration, even after factory coverage ends. If you’re planning to take a lot of long road trips in the new vehicle, it’s important to know that while buying the car means you can drive it as much as you like, a lease generally constrains you to about 12,000 miles per year, with a penalty if one exceeds that.
There’s no doubt that you’re excited about adding some new wheels to your garage. However, don’t let that excitement blind you to the implications to your finances. For more crucial distinctions between purchasing and leasing a new car, check out the accompanying resource.
Infographic created by O’brien Toyota
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