The Buick Best Buy: Should I Lease Or Finance My Car?

Key Takeaways:

• Leasing gives you the liberty to drive a new car every few years while only paying for your usage.
• Financing is more expensive in the short term, but it’s an investment that will eventually pay off.
• Each option requires a monthly payment which can be low or high depending on the manufacturer and type of car.
• You should also factor in the length of the lease or loan, your credit score, and how much money you’re willing to put down.

You’re not alone if you can’t decide which direction to go in for your next automobile. At our Buick dealership, we often get asked by drivers whether it’s better to lease or finance their vehicle. To help you and several potential car buyers out, our experts at Auffenburg Buick GMC of Carbondale have compiled this comprehensive guide so you don’t face any more troubles when buying your new vehicle.

Leasing a Car

Leasing a car has its perks. For one, you’re never stuck with a vehicle longer than you want; leases typically last 2-3 years. This can be excellent if you like driving the newest model every few years. You also have lower monthly payments with a lease since you’re only paying for the car’s depreciation during the term of your lease rather than the entire purchase price.

However, there are also some downsides to leasing a car. For one, you’re never really building any equity in the vehicle since you don’t own it. So, it’s not ideal if you’re looking to sell the car eventually.

You’re also responsible for adhering to strict mileage limits with a lease, which can be tough if you drive a lot. Finally, you’ll have to pay a fine at the end of your lease term if the car has wear and tear beyond regular use.

Financing a Car

Financing a car is the more traditional route, and it has its advantages as well. For one, you own the car outright once your loan is paid off, so you can do whatever you want with it – including selling it. You’re also not restricted by mileage limits, so you can drive as much as you want without any penalty.

Of course, the disadvantage is that you’ll have higher monthly payments than if you leased the vehicle, and you’ll be responsible for all repairs and maintenance afterward.

Let’s look at both these options individually.

Monthly Installments:

Car Lease:

With a car lease, your monthly payments will be lower than if you finance the car because you only pay for a fraction of the car’s value. The trade-off is that you don’t own the car outright, and mileage limits restrict you.

Car Financing:

When financing a car, your monthly payments will be higher because you’re paying off the entire cost of the vehicle over time. However, once your loan is paid in full, you own the car and use it of your own accord.

Mileage Restrictions:

Car Lease:

One of the most significant downsides of leasing is that you’re typically restricted to a certain number of miles per year. This limit can be a pain for those who are fond of long drives and road trips. The typical limit is 12,000 miles annually, but some leases allow for 15,000 or more.

Car Financing:

With car financing, you don’t have to worry about mileage restrictions. As with anything you own, you can drive as much or as little as you want without worrying about penalties.

Long-Term Commitment:

Car Lease:

Leases typically last anywhere from 2 to 4 years. This can be great if you prefer having a new car every few years, but it also means you’re locked into a long-term commitment. If you need to get out of your lease early in case of an emergency, you may be subject to some hefty fees.

Car Financing:

When financing your car through a bank or credit union, you usually look at a loan term of 4 to 7 years. But, just like with a lease, you may have to pay some fees if you need to get out of your loan early. So when it comes to the question of commitment, it’s a wash.

Up-Front Costs:

Car Lease:

Leasing requires little to no money, which can be great if you’re short on cash. In fact, many leases even offer 0% down payment options. So, if you’re looking to keep your up-front costs low, leasing might be the way to go.

Car Financing:

Financing your car requires a down payment, ranging from 10% to 20% of the car’s total value. So if you’re looking to finance a $20,000 car, you could be looking at a down payment of $2,000 to $4,000. However, some dealerships offer lucrative financing options with little to no money down.

Fees:

Car Lease:

Fees, in this sense, are the penalties you may endure for going over your allotted mileage or not meeting other terms of your lease agreement. With a closed-end lease, these fees are typically included in your monthly payment, so you don’t have to worry about them.

Car Financing:

The interest forms your monthly car fees. Remember the installments we discussed? Well, it goes with the interest, which is the percentage of the loan that the lender charges for lending you money.

Credit Score:

Car Lease:

A credit score is not factored into a car lease. You can only build your credit score when you take a loan, and since you’re not doing so in a car lease, it doesn’t matter.

Car Financing:

Your credit score will be affected from when you finance your car to when you’re done paying your installments. Your history of car payments will either help you or hurt you when you’re looking for other loans in the future.

Ending Note:

A clear perspective helps provide a clear direction ahead. With this comprehensive guide, we hope your decision to lease or finance your car is as easy as possible!

Your Buick Dealership at Broskydell, IL

If you can’t decide which option to go with or which Buick model is best for you, let us help. At Auffenburg Buick GMC of Carbondale, serving Broskydell, IL, we are nothing but a name of excellence. You can entrust us with your car buying experience, and we promise to make it as smooth and seamless as possible.

You can explore our financing options or apply for financing right away.