Leasing vs. Financing a New Vehicle
Leasing vs. Financing a New Kia at Bob Moore KIA
The option to lease or buy a vehicle is completely up to the individual’s wants, needs, and expectations. Getting a new car is a wonderful experience; everyone loves that “new car smell”. Once you have chosen your new car, truck, or SUV, the next step is deciding whether to lease it or buy it. What are the benefits and the downsides of each choice?
Leasing with Bob Moore KIA
When leasing, what you are doing is renting the car for a longer period of time, usually a two-to-three-year lease. The biggest positive to leasing is that your payments are substantially lower than if you were to buy the vehicle. You basically pay for the vehicle’s depreciation along with rental fees and taxes. This option keeps you driving the car during the time when it’s still covered by the warranty.
Once your lease is up, you turn the car back over to the dealer at which time you can lease another new car. That’s another perk to the leasing option; you are always driving a newer vehicle. When your contract is up, you do have the option of purchasing the vehicle at that point.
The biggest downside is that you don’t own anything. The vehicle is not yours so you can’t sell it or even customize it. Any damages beyond normal depreciation are your responsibility to repair before turning the car in. There is also the limitation on miles to consider. Any miles over the amount in your contract will be charged to you. Finally, there is the fact that with leasing you are forever stuck in a payment plan. The monthly payments never stop, unlike purchasing where there is an eventual end in sight.
Buying a New Vehicle at Bob Moore KIA
Buying the car means you will own it. If you have the resources to pay in cash, that’s great. Most people end up financing their new car, either through the dealer or a finance company. This means you have monthly payments, and they are usually higher than payments for a lease.
The most notable perk to buying the vehicle is that you are the owner. Even if the bank has a lien on it, it is still your car. This means you can do whatever you want with it, paint it, beef up the engine or put in a spectacular sound system. When the loan on the vehicle is up, you now have something of value. You can sell it or use it as a trade-in on a newer vehicle or just keep driving it. Many car owners have been able to drive their vehicles for years past their final payment.
The drawbacks to buying the vehicle are that you may have much higher payments due to interest on the loan. Also, when the warranty runs out, you are stuck with all the repair costs. If you blow the engine or the transmission goes out, you will have to foot the bill even if you are still making payments.