All About How To Decide Between Buying and Leasing an Auto Vehicle
When it comes to buying a car, buyers have two choices: Buy or lease. There are important factors to consider when deciding between purchasing a car and leasing one. It’s important to pick the choice that makes the most sense for you financially. The difference between the two boils options down to ownership. And, whether or not you have the financial means to support ownership. There are both benefits and drawbacks to each option, so take these into consideration when choosing how to acquire your shiny new Toyota Corolla.Long-term Intent
When a customer decides to buy a car, they own it. Typically, when choosing to buy a car, that person has long term intent. No one buys a brand new 2019 Toyota CH-R with a plan to sell it again in a year! There are a few other factors, however, that can help you figure out whether you should buy that vehicle or lease it.Mileage Cap
When you buy a car, there is no contractual limit to how many miles you can drive it. Since you own it, drive that Toyota Camry down to the ground! When you lease, dealers will typically have a set amount of mileage that the borrower is allowed to drive. The mileage cap is explicitly written in the lease contract and can give the borrower limited amounts of travel time. If you return your borrowed car with higher mileage than specified in the contract, your dealership can charge you an additional fee. So, if your commute to work is a lengthy one, keep this in mind as you’ll want to make sure not to exceed the mileage cap. If you drive locally, however, it probably makes more sense to lease that Toyota Highlander you’ve had your eye on. Buying a car when you won’t need it for long distances can rack up the costs quickly.Monthly Payments
When you buy a car, the longer you own it and drive it after it has been paid off, the cheaper the car becomes. That doesn’t mean it’s the cheaper option, however. If you purchase a car, the interest rates and monthly payments are going to be higher than if you were to borrow a car. So, buyers tend to finance their car via auto loan payments. Auto loans aren’t handed out like free candy, unfortunately. Your individual credit score will play a big factor in your financing rates and depending on the loaner, can fluctuate drastically. When borrowing a car, your monthly payments are determined by two factors:- The car’s depreciation, or the difference between the manufacturer suggested retail price and its residual value and
- The car’s interest rate.