Buying vs. Leasing
Have you ever found yourself wondering about the difference between buying vs. leasing a new car? You’re not alone. In fact, plenty of drivers come to Norm Reeves Volkswagen Superstore in Irvine asking what it means to lease a car and if that option really makes sense for them.
Having years of experience in auto financing, we’re clearing the air once and for all so drivers like you in the Mission Viejo and Rancho Santa Margarita area can fully understand the pros and cons when it comes to buying and leasing, so you can make the right choice the next time you need a new vehicle.
Benefits of Buying Your Next Vehicle
The primary benefit of buying your next car is that you’ll own the vehicle once you pay back the auto loan. The title will be in your name, and you can keep it for as long as you want.
However, even if you haven’t fully paid off the car, you can still trade it in or sell it if you want. You can use the money from the sale to finish paying the loan or a dealership can pay off the loan for you and add the remaining loan amount to the purchase of your next vehicle.
Loan payments when you choose to buy a car are usually higher than if you decided to lease it. That’s because you’re slowly paying off the full price of the vehicle, along with the cost of interest and other fees.
With owning a vehicle, you’ll also notice that its value depreciates over time, meaning it will be worth less when you sell it than it was when you bought it. You’ll also be responsible for selling or trading it if you decide you want to get rid of it.
What Does It Mean to Lease a Vehicle?
One way to think of leasing is like an extended rental period. You don’t own the vehicle when you lease it unless you decide to buy it at the end of your lease agreement.
On the plus side, leasing payments are usually significantly lower than loan payments. That’s because you’re paying for the depreciation in value rather than the total cost of the car. You also don’t have to worry about the car’s future value affecting you financially.
However, there are some limitations to leasing that you should be aware of. For one, lease agreements usually specify a limit on how many miles you can drive over the course of the leasing term. If you go over the agreed-upon mileage amount, you’ll have to pay an additional fee. It’s also likely that you’ll be responsible for any excessive wear and tear.
Why You Might Choose Leasing Over Buying
Although you won’t own the vehicle, there are a few situations when leasing makes sense. For one, if you’re not sure what you want your next car to be, leasing can be the ultimate test drive. You’ll have the opportunity to test out a variety of vehicles for months at a time without having to go through the hassle of buying and selling each one. Then when you know which model you like, you can simply opt to purchase it at the end of your leasing agreement.
Another good example of when you might want to lease a car is when you’re only living somewhere temporarily. Say you’re spending a few months in the Irvine area. Renting a car for six months could be expensive, but leasing lets you enjoy regular monthly payments and the luxury of simply returning the car when your lease is up.
Learn More About Buying and Leasing
If you’d like to learn more about buying and leasing, contact us at Norm Reeves Volkswagen Superstore. Proudly serving the communities of Rancho Santa Margarita, Mission Viejo, and beyond, we’ll help you explore all of your auto financing options to find the one that makes sense for you.