How to Pay for Your Next Vehicle: Leasing vs. Financing

November 30th, 2018 by

A close up of one person handing keys to another person featured in a blog post about leasing vs financing

Before stepping onto the lot or visiting the auto finance center, it’s good to know how you’re planning to pay for the vehicle you have your eye on. We’re happy to highlight the differences between leasing and financing a vehicle.

Leasing vs. Financing: What Makes Sense for You?

Leasing

If you like driving a newer vehicle with latest amenities every 2 to 3 years, then leasing could be a viable option for your car needs. When you lease a car, you’re paying for the depreciation of the vehicle over the term of the lease plus any fees and interest. This results in lower monthly payments, which allows you to afford a nicer vehicle or available options at the same payment as buying.

Additionally, most leases require a low down payment as well — sometimes nothing at all. You’ll also have a majority of the new car warranty coverage, so repairs are covered during the length of the lease.

You will also be restricted to how many miles you can drive per year during the lease, and any miles you go over will result in fees when you turn the car in.

At the end of your lease, you’ll drive the vehicle to the dealership and pay any remaining final fees, overages, and wear-and-tear charges. Then you’ll have the option to purchase the vehicle outright, or lease a new one right there and drive away.

Financing

One of the prime benefits of financing a vehicle is that you own it once your payments are complete. This provides you with equity given that the payments have outpaced the rate of depreciation on the vehicle. You also have the ability to sell it at any time, and you can always trade in your vehicle toward the purchase of a new one.

If you drive a lot of miles each year, financing may be a more cost-efficient option. When you choose to finance a vehicle, there are no mileage restrictions, so you can hit the open road whenever you want. You can also customize it how you want, such as switching out stereo components, upgrading the seating, or adding a remote starter.

Financing usually comes with higher up-front costs. You may face a larger down payment than a lease, which you can put your vehicle trade-in toward, and the monthly payments tend to be larger because you’re financing the entire vehicle over the terms.

Lease or Finance Your Next Vehicle at the Schumacher Auto Group

At the Schumacher Auto Group family of car dealerships in West Palm Beach, FL, we’re happy to help you with your car leasing or buying needs. And don’t forget to check out our auto lease deals and specials.

Posted in Helpful Tips