More than ever before, car shoppers have found leasing a new car, truck, or SUV offers significant savings over buying new. The move to leasing versus buying isn't a new trend, only the result of great lease deals that provide flexible, short-term agreements that traditional auto loans can't match. Even with this new trend, many rumors continue to circulate regarding the merits and risks associated with leasing.
Most people are quick to give you their opinion, but savvy shoppers realize that opinions aren't always based on facts. Deciding which option, leasing or buying, works best for you depends on your particular needs, budget, credit, and more. To that end, we've put together a real-life scenario that details the acquisition process for a New Chevy bought or leased from us at White-Allen Chevrolet. You can see the pros and cons for yourself to help you decide which option benefits you most.
For this example we will use $32,285 as our MSRP. Let's assume you don't have a vehicle to trade-in either, but you do have $4,000 to put down. Now let's compare financing your New Chevy versus leasing it.
Financing
Let's also assume you have excellent credit and qualify for a 60-month car loan with a 5.0% APR. After adding the 7.5% sales tax and putting your deposit down, you end up with a monthly payment of $534 per month. Let's assume you kept your Chevy in excellent condition and kept the mileage low until you traded it in three years later. You would owe $12,166.76 and would still have two years of payments to make before you owned your new Chevy outright.
Leasing
Now let's say you were thinking about leasing that same new Chevy with an MSRP of $32,285 and the same down payment of $4,000. Your sales tax, title fees, acquisition fees, and registration fees are included in your lease. You also get 10,000 allotted miles per year for three years. For first-time leasers with us, your monthly payment would come out to $509 per month. Now, if you only wanted to put down $2,000 your payment would be $573 per month and if you put $0 down, your payment would be $637 per month.
Other Ways to Save
Want to save even more without having to put more money down? If you agree to drive less than 10,000 miles per year, your payment can go down that way. Leasing can be a great option for a vehicle you don't plan on putting many miles on or if you own multiple vehicles, leasing can be a great option for a secondary vehicle that you don't plan to drive as much as your primary vehicle.
Things To Consider When Leasing
Is it any wonder the savvy car shoppers are opting for leasing over buying? As good as the deal sounds, you still need to consider several key points before leasing a car. You must be confident in your mileage projection. If you tend to jump in your car and take spontaneous road trips, those miles add up. Going over your allotted mileage can cost you a lot in overage fees. If this sounds like you, buying might be the better option.
You can't work on your leased vehicle. The dealership must do all repairs and maintenance. This requirement includes modifications, even if they add value to the car. If you want to upgrade to some cool new wheels, or add a spoiler, or tint the windows, you can't. You don't build equity either with a lease. When the lease term expires, you can't use the car to trade-in on a new purchase or sell it to realize any potential profit.
Advantages To Leasing
You get to upgrade to a newer model every three years. The average person keeps their car for six years, which means some go longer while others go shorter. But if the average time totals six years, you can have two vehicles during the time your friends and family stay stuck with the one they purchased. The auto industry constantly introduces new features and technology. With a lease, you're free to take advantage of the latest Chevy has to offer.
In the end, you can save money in monthly payments and reduce your risk as an owner. You also don't have to worry about paying off the balance of a loan if you decide to trade in early.
Should You Lease or Buy?
Ultimately, your situation will determine which option suits you better. We invite you to contact a finance specialist today at White-Allen Chevrolet. Our finance department staff will help you examine your needs and budget and find the best lease deal that saves you money and reduces any risk you might encounter. If purchasing a new vehicle presents the better option, we can pre-qualify you for a loan instantly. Either way, you will leave our dealership and head home to Princeton Heights, Wolf Creek, or wherever you reside in the Dayton area, confident you made the right choice.