When you’re looking at a new vehicle, you have two options for payment: leasing and purchasing. Both require a credit approval and monthly financing. But what’s the difference between the two? Being informed of your options can help you make the right choice and get the best deal on your new vehicle.
Think of leasing like you would renting; you’re paying a monthly payment for the use of the vehicle without paying toward owning it. Just as you would sign the lease to rent an apartment, leasing a vehicle has a preset term limit before you return it back to the dealership, which can be either a length of time or a specific mileage limit. A lease may or may not require a down payment, which can depend on your credit application. There are several pros and cons when it comes to leasing a vehicle. One of the main benefits is a lower cost. Leasing typically comes with a lower monthly payment, and since you’re leasing a new vehicle, there’s no worry about the wear and tear you’re incurring. New vehicles are most likely covered under warranty, so you have added protection during your lease term. However, the downside is that you’re paying toward something you’ll never own. You might be limited to how often or far you can drive the vehicle due to mileage limitations, and you’ll rack up extra charges if you go over that limit.
When you choose to purchase a vehicle, it’s more like buying a home. Your payment goes toward the vehicle, making you the owner once your loan is paid off. At the time of purchase, you’ll submit a credit application, submit a down payment, and receive financing through the dealership or your own bank. Then, each month, you’ll pay a set monthly amount toward the ownership of your vehicle. The monthly payment tends to be higher, but it might be worth it knowing you’ll eventually be the full owner. When you purchase, you’re free to customize your vehicle and drive it as often or as far as you’d like without any penalties. Purchasing does have its downsides, though. You’re totally responsible for all maintenance and upkeep of the vehicle for as long as you own it, and depreciation rates can be unpredictable.
Buy or Lease with Carnamic
Whether you choose to lease or purchase, you can find your next new vehicle here at Carnamic! We offer in-house financing, hassle-free lease options, and a huge selection of new vehicles at any of our Bay Area locations. Contact us today to discuss your options and get help finding your new car!