Buy Or Lease?

Buying a Car vs. Leasing a Car in Kansas City

A reliable method of transportation is essential in just about everyone’s life, and for most people, that means driving a car, truck, or SUV. You now have more choices than ever for ways to procure your vehicle. Financing and leasing are both good options.

Many people don’t understand how these types of programs work and what would be best for them financially. It really depends on your situation as to which choice is best for you. To help you make that decision, here’s some information outlining the specifics of each alternative.

Financing a Car

When you decide to purchase a car, whether you pay the entire cost upfront or finance it, the vehicle will ultimately belong to you. This is a great selling point of financing a car. You must meet certain responsibilities set forth by the lender – chiefly making your repayments on time - but for all intents and purposes, the car is your property.

All-in financing offers do exist where you don’t need to pay an initial down payment, but generally you will make a down payment on the purchase price up-front. To defray the costs, many people choose to trade in their current vehicle and use the equity to make this payment. The amount required is determined by the policy of the lender and your credit score. The lender will then determine an interest rate for you, also based on credit score, and set up a monthly payment plan, usually for three to six years, at the end of which you will have paid the full amount owed on the car. The lender will send you a Lien Release to keep for your records.

If at some future point, you choose to sell your car, the car is worth whatever an interested buyer is willing to pay for it. This makes buying more of a long term investment than leasing. The amount you will receive will depend on the type of car, the year, the mileage, and the kind of condition it is in. Taking care of your investment and making sure that you get all scheduled maintenance performed will help you tremendously in terms of future resale value.

Leasing a Car

When you lease a vehicle, you do not actually own the vehicle, you are essentially paying for the use of it. The lender that you signed your lease with owns the car. This can make the monthly outlay for leasing a car much less than purchasing, and you’re not tied down to one car forever. You can always choose the newest and latest vehicles, and you can typically drive around in a more expensive car than if you were to buy one.

As far as upfront costs go, leases require a lower down payment, although some people choose to pay a little down in order to have a lower monthly payment. You simply need to pay the first month’s payment, a security deposit, and assorted fees and taxes, and you’re off on the road.

If at any time during the lease you get tired of driving the vehicle you’re leasing, you have the option to trade it in for something different. At the end of the lease term, you can either return the car and lease another, or purchase the vehicle.

You still need to look after a leased car, because if you put an unusual amount of miles or wear and tear on the car, you may be looking at some small extra costs upon returning the vehicle. However, you never need to worry about huge mechanic bills for a fading car past its prime, as you can take your pick from the newest vehicles available. Buying the vehicle outright is even an option at any point during the lease term, once again making leasing a car a versatile option.

The best cars to lease are those that depreciate in value the least. Since they are still worth a lot after you have used them, you don’t need to pay so much to lease them! Smart shoppers review their options carefully before leasing.

Hopefully, this offers a clear explanation of the benefits of buying and leasing a vehicle. There is no one best choice for everyone; both are great options and we are pleased to recommend them. What makes the most sense for you will depend on your lifestyle and income. The most important thing to do is make sure you research all your options, budget your payment carefully, and make the best decision for you personally.

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