Are you on the hunt for your next ride? We know that there are tons of factors to be considered when you start looking for which car to buy. Whether you should add warranties, what brand to choose, and, of course, whether you should lease or finance your next vehicle are all questions every shopper has to ask themselves before they hit the lot.

Leasing is often an overlooked option when you are shopping for a brand-new car, but just like renting a house or apartment, leasing a car does have benefits that many people fail to realize. Many consumers approach car-buying in a very narrow way and do not see that leasing may be the best approach to get into the exact car they want, without the commitment of a 5+ year loan, which can make you feel “stuck” in that car. 

While buying a car remains the most common route for a multitude of valid reasons, it is important to remember that leasing is also a viable option. 

What Are the Benefits Of Leasing? 

The biggest and most common benefit for leasing a vehicle is the lower monthly payments. Lease payments do fluctuate mildly, but on average you would be paying less for a lease monthly than if you were to traditionally buy a new car. Also, your up-front costs will be lower than a traditional finance deal. You can usually find lease options for little to no down payment, which can sometimes be a major barrier for buyers. This is very important to anyone who is on a budget and wants to keep their car payment and initial costs low while still having the benefits of a new car. 

That leads into another major reason for leasing a car: you can change cars every 2-3 years. While some people may not be interested in always having something new, there are those who want to keep up with the current technologies, features, and capabilities that new cars offer. There are many reasons to want to stay in a new car: peace of mind, fuel efficiency, a clean interior and exterior, and yes, that new car smell. 

Another reason you may want to always have a new car instead of paying off and keeping a car for a long time is because of repair costs. Leasing means that the car you are driving remains under its factory warranty while it is in your possession, and you will only need to pay for wearable parts like oil changes, wipers, brakes, and tires. Repair costs on a car after its warranty ends can be unattainable sometimes, and by staying in a vehicle with minimal repair costs, you will save money in the long run. 

What Are the Downsides of Leasing?

While leasing is a great option for budget-conscious shoppers, there are a few downsides to consider. The biggest one is that, when all is said and done, you do not own the car. While cars do not build equity normally, many people do go into car shopping with ownership as their end goal. This is a valid approach, as many like the years with no car payment after their loan is paid off. 

Another major downside to leasing is that there will be a mileage limit that you can drive per year. Also, if you exceed said limit, there are overage costs, usually per mile. The limit for your specific lease is determined at the time of signing. A common choice is 5k a year, but some people who drive more may opt for a higher option, which will affect the price. If you are someone who does not drive a lot and knows you would stay under those mile limits, then a lease is a great option for you, but if you routinely put thousands and thousands of miles on your vehicle, it may be a better choice for you to buy. 

What Are the Benefits of Buying?

Buying is the most common approach when shopping for new vehicles, and for good reason, too. The main reason that so many people opt to buy instead of lease is because when the loan is paid off, you are the owner of that car and can use it however you please. This freedom is hard to walk away from, especially if you’re someone who has never leased before. 

Unlike leasing, when you buy a car you can drive it to your heart’s content. There are no X miles for X-year terms, and most people who drive a lot each year choose to go with buying for that exact reason. 

Another benefit for buying is that when you go to get a new car in the future, the one you bought can be used along with or instead of a down payment. Down payments are often the largest upfront cost to buying a new car, and this approach can help mitigate the cost.

Over many, many years, buying can often save you money if you keep your car longer than just the loan term (meaning if you financed for 6 years, if you keep it for 10, you aren’t paying a payment for 4 years.) While leasing, you are going to be paying a lower monthly payment consistently until you stop leasing your vehicles with no break, which can sometimes add up to more than just purchasing. 

What Are the Downsides of Buying?

That being said, buying is not without its drawbacks. The biggest one being that once your car is out of warranty, all repair costs fall on you, the consumer. Many people do choose to add added protections like extending their warranties or adding aftermarket service contracts, but eventually all of these things will run out, and you may be stuck with a large repair bill that is even more than the car is worth. 

Another reason against buying is that you are “stuck” in that car. This means it is much harder to get out of the car while you still owe on it. This, paired with the cost of repairs, can sometimes mean you are stuck in a money pit that consistently needs work done. 

Buying may be lower in cost over decades, but the initial cost tends to be much higher due to down payments. While not all cars need a down payment, many buyers need a decent down payment to get a good finance deal in place. This can sometimes be 5-10 thousand dollars depending on the vehicle you are purchasing. 

Quick Breakdown

Leasing:

• Pros
  • Constantly have new cars
  • Have the cars under warranty 
  • Lower upfront cost
  • Lower monthly payments
• Cons
  • You do not own the car
  • Mileage limits

Buying 

• Pros 
  • You own the car after it is paid off
  • You can use the car as a down payment to purchase another one
  • You can drive as much as you want
• Cons
  • Warranty will run out
  • Higher upfront cost
  • You cannot switch between new cars as easily or as often

How Do I Know Which Is Best For Me?

Whether buying or leasing is better for you is more of a choice than an objective fact. Though, there are some situations where each is more beneficial. 

Leasing:

• If you want to change cars every 2-3 years
• If you want to have a lower monthly payment 
• If you do not want to spend much in repair costs
• If you drive very little

Buying:

• If you want to own your car
• If you drive a lot every year’
• If you want to have the car to use as a down payment in the future
• If you are taking advantage of special offers and incentives

Does Brand Matter?

Yes! Each car manufacturer is different and has different offers, incentives, and lease amounts. It is best to choose what brand and model you are interested in before you weigh your options, because lease amounts can change depending on your choices. 

Some companies have really great lease deals year-long, while others prefer to incentivize buying more than leasing. These offers and incentives are paramount in making your decision, especially because some finance deals can put your monthly payment even lower than a lease payment if you shop at the right time. Always visit your chosen dealership or give them a call to learn about current offers and incentives. 

Summary

Leasing and buying both have their places in the car-shopping world, and the right one for you can greatly depend on a number of factors. Overall, if you’re looking for flexibility and lower payments, go for a lease, but if you’re wanting to keep a vehicle for a long time and want to eventually own it, buying is the way to go. 

If you’re unsure what is right for you, the best course of action is to always reach out to your dealership and talk through your options. 

If you’re looking to lease or buy a new CDJR vehicle, reach out to us at Axius CDJR for more information on our current offers, incentives, and lease payments.

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