Shopping for a new car? One of the first decisions you should make before selecting your next car is whether you’d like to buy or lease. There are different pros and cons to buying and leasing, especially depending on your financial situation, driving habits and the type of car you’d like to get. Regardless of what you’re looking for, you’re bound to find it at our dealership.
Most people buy a car by making a 10 to 20 percent down payment and financing the rest, although you can also pay for the entire vehicle in cash. In terms of benefits, when buying a car, you tend to get the most bang for your buck in the long run. When financing, you’ll make monthly payments for a few years, but you’ll be investing equity in your car. For practical buyers that can afford a down payment, buying is the way to go.
Buying requires a larger down payment than leasing. When buying, most car shoppers will need a few thousand dollars for the down payment. Plus, monthly payments are usually higher when buying than leasing, which means you’ll need a steady source of income.
There are several pros to leasing. First, you often make a smaller down payment and you’ll have smaller monthly payments. For recent grads or those on a fixed income, leasing is often a smarter choice. Additionally, if you want a luxury or sports car that might normally be outside of your price range, leasing can make your dream car a reality.
Unlike financing a car, when you lease you don’t invest equity in your car. You have to give the car back when the lease is up, which means it’s not always a great long-term investment. Additionally, many leases have mileage restrictions (often 12,000 miles per year), so you may need to monitor your driving habits.
Visit our finance department at Terry Reid Mitsubishi to learn more about your options.