Should I buy or lease my next car?
This the question most of us have running through our minds when shopping for our next vehicle. So many offers are advertised but never provide enough information to help in your decision besides having a lower monthly payment. Krenzen's philosophy for 46 years is to sell and lease vehicles in a simple, straight forward, and stress free manner, the way car buying should be...
Here are some comparisons to consider in your decision process.
- Leasing: You get to use the vehicle for usually 36 months with designated miles which can be driven during the term of the lease. You do not own the vehicle. At the end of the lease, you will need to return it and have the choice to buying or replacing it with another vehicle.
- Buying: You own the vehicle. Choice is yours to pay for it all at once or take out a loan and make payments to the lender of your choice.
Up Front Costs
- Leasing: The only required upfront costs are your first payment, license fees, and applicable taxes. It’s your choice either pay this upfront or include it in your monthly payment.
- Buying: No required upfront costs. It’s your choice to put as little down as you want including the license fees and applicable taxes.
- Leasing: Lease payments are usually lower than loan payments because you are only paying for the vehicle’s depreciation and the amount of use of the vehicle.
- Buying: Monthly payments are usually higher because you are paying for the entire car. You may be able to finance the vehicle for 72 months or more.
- Leasing: You choose the amount of miles you want as little as 10,000 miles or as many as 30,000 miles per year. You will likely pay extra charges for exceeding your chosen mileage limits.
- Buying: There are no mileage limits for your vehicle. Usually, the higher mileage will affect the resale of your vehicle.
- Leasing: At lease signing, you have a guaranteed value, the residual value, at the lease end which is on the lease agreement. The risk of future value lies with the leasing company.
- Buying: You have the risk of the vehicle’s market value when you decide to sell or trade.
- Leasing: You may terminate your lease at any time and walk away. However, you are responsible for all the remaining payments and early termination fees. You can choose to purchase your vehicle at any time as well.
- Buying: You may trade or sell your vehicle at any time. If financed, you are responsible to pay off the existing loan balance.
End of Term
- Leasing: You can either decide to lease another vehicle, buy your current vehicle, or turn it in and walk away. You may be responsible for excessive wear and tear charges.
- Buying: At the end of the loan term, you have no further payments.
Excessive Wear & Tear
- Leasing: There is a limit to wear of the vehicle. This included dents, scratches, glass breakage, or items needing repair such as tires. Typically, your vehicle will be evaluated by an independent company to determine if any additional charges may exist.
- Buying: There is no limit to the wear of your vehicle. The condition of your vehicle will determine its market or resale value.