Buy vs Lease: Which is Better?
Let’s face it: buying a new car can be expensive, and getting approved for a car loan often means you need a decent chunk of change up front. Of course, a decent credit score is also essential if you hope to keep your monthly payments reasonable. Unfortunately, sometimes the standard car buying requirements are out of reach for many Americans. Leasing can be a great option for those who can’t afford a hefty down payment and do not want to take on the financial responsibility of owning a vehicle.
Have You Considered Leasing a Car?
Signing a lease allows the consumer to drive off the car lot in a new car without going through the headache and hassle of the purchasing process. When comparing buying vs leasing, leasing a car requires a smaller down payment and often provides lower monthly payments.
Common Leasing Terms
Let’s define a few important leasing terms to make sure you are prepared to land the best lease deal possible.
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Money Factor
Money Factor is lease-speak for the interest rate or a fixed amount that is used to configure your lease payments. This is important because it directly affects the dollar amount of your payments. When you take the extra time to negotiate the money factor, you will have a greater chance of paying less each month toward your car payment.
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Mileage
Mileage is definitely a factor to consider when leasing. Understanding the mileage rules can make the difference between walking away free and clear or being charged a hefty mileage fee. “Allowable Mileage” is the number of miles the driver is allowed within the leasing period at no additional charge. Accurately taking into account the mileage you plan to acquire over the course of your agreement will save you big time when leasing a vehicle.
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Residual Value
Residual Value is the predicted value of the vehicle at the end of the standard leasing period. The residual value is determined by the leasing company and is important because it is used to calculate monthly payments.
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MSRP
MSRP is also known as the “Manufacturer’s Suggested Retail Price” and is commonly referred to in the industry as the “sticker price” of a vehicle. The MSRP is important to consider because the residual value of the vehicle is based on this number.
Benefits of Leasing
• Monthly payments and lower interest rates
• Drive a vehicle during its most reliable years with no unexpected out-of-pocket expenses
• Drive a make and model you might not normally be able to afford
• Future value of the vehicle does not affect you
• When the leasing period ends you can drop the car off at the dealership and walk away worry free
Tips for Securing the Best Deal on a Lease
• Always check the dealership for leasing specials and inventory
• Pick a vehicle with the best-case scenario residual value
• Get quotes on 2-3 different vehicles before making a final decision
• Request at least a 36-month lease with 12,000 miles per year and only $1,000 in drive-off fees
After a closer look at the leasing process and exploring the benefits, you’re now prepared to secure the best lease deal. We would be happy to tell you about our inventory, and help you find a great vehicle that guarantees you an even better deal. We will deliver any vehicle to pre-qualified customers to ensure you can take an extended and safe test drive of your vehicle of choice. Give us a call and experience the difference at Patterson CDJR in Marshall,TX!