Buying Versus Leasing


This is an argument that has been raging since leasing first began.  Initially it seemed like one of those questions that had no right answer, however, the more you know and understand the car business the clearer the choice becomes.  Whenever there is something I don't fully understand, I like to look to the "insiders" or the "experts" to see what they are doing and what they are doing is leasing!  The main reason that more people don't lease is simply because they don't understand it.

The following list contains things to consider when making your next purchase.  Buying versus leasing, the two different ways of paying for your new car. 


1.  This method produces lower payments in most cases?

Leasing almost always offers lower payments, this is one of the biggest advantages over buying a new car.


2. This method has less impact on your debt to income ratio?

Leasing has less of an impact.  This is because only the remaining payments show on your credit, versus the entire balance when you purchase the car.  This can make buying things ,like a house, easier down the road.


3.  This method has you paying for costly repairs?

Buying has you paying for repairs.  Since, with leasing, your car is covered by warranty the entire time you are driving it.


4.  This method has you buying new tires?

BuyingSince you own it and are most likely keeping it for a longer period of time you need to buy tires for it.  When leasing you will get a new car before the tires are even worn out.


5. This method you pay for fluid replacements?


Buying puts you in this situation, most fluids, except for oil, are recommended to be changed between 30k and 60k miles.  If you leased your vehicle you will be getting a new car about the time the guy who bought his, is
flushing his brake and power steering systems for a few hundred dollars.


6.  This method you are always under warranty?

Leasing is the winner here,  it is designed to get you out of the car at the 2-3 year point just as the manufacturers warranty is expiring. 


7.  This method you get a new car more often? 

Leasing!  Statistically people that choose to lease will own more new cars than people who purchase their vehicles.


8.  This method you have to pay for GAP insurance?

BuyingIf you owe more than your car is worth you need to purchase GAP insurance to protect yourself.  The insurance  company will only pay what the car was worth not what you owed.  For many people the first time they ever hear about GAP is when they find out that they need to write a check for the remaining balance of the car loan after a total loss event.


9.  This method includes free GAP insurance?

Leasing includes free GAP insurance.  If you total out your car while leasing the entire loan is automatically paid off in full.  Leaving you free to come in and pick out a new car worry free.


10.  This method offers protection from down market conditions?

Leasing is your only option here.  If you buy a car and the value of the model falls off of a cliff,  you still owe just as much money on yours.  If you leased it you would simply turn it in at the end of the lease and walk away, leaving the problem to the manufacturer.


11.  This method offers protection from a damaged title? 


Leasing get this one too, this is similar to the down market above.  If your car was in an accident and has been repaired, but just isn't as nice as it used to be, one way you own the problem the other way, you turn it in and let the manufacturer worry about the future issues.



12.  This method reduces or eliminates paying TAXES?

Leasing pays less sales tax.  You only pay on your payment instead of on the entire purchase price.  This can save you over $2,000 in upfront taxes and fees.



You can probably tell by now that we feel very passionately about leasing.  When you lease a car you get the benefits of buying without the obligations.  You are making a commitment for only 2-3 years versus up to 7 years when your purchase.  You get to enjoy the vehicle while it is new and under warranty, and get rid of it before the costly repairs start.  If you have any additional questions about leasing or would like to see how it would fit into your specific situation, please contact one of our sales representatives.