Leasing vs. Financing a New Vehicle at Stanley Ford McGregor
A common practice these days still on the rise is vehicle leasing. Many people are choosing this option instead of getting financing. There are some advantages to leasing, but there are also several disadvantages, just as there is with financing. If you are in
McGregor,
Killeen, or
Waco and you are considering either option,
Stanley Ford McGregor can put you behind the wheel of a new Ford vehicle.
Financing Advantages
The most obvious advantage is that when you buy, your vehicle becomes an asset. When the vehicle is paid off, it is yours to do with as you choose whether that means selling it, trading it in for something newer to lower your interest and the principle, or you can give it to your new teenage driver if you so desire.
Financing Disadvantages
When you finance a new vehicle, your payments each month will be larger, and you will lose money on your investment due to depreciation. In the first few months after driving your new vehicle off the lot, your investment will have depreciated by 10% and within the first year it will have depreciated by 30% or more. Another consideration is that your financing terms could mean that you will be making payments as far out as seven years. A new vehicle means you have a substantial sales tax you will have to come up with it right away.
Leasing Advantages
When you lease a new vehicle, you have the advantage of driving a new car, possibly a top-of-the-line vehicle with lower payments that you may not have been able to afford otherwise. You also still have the manufacturer’s warranties available with this option. Leasing usually means a shorter-term, normally 2-3 years, vs 5-7 years. With leasing you also have the following other advantages:
- Your lease may include free scheduled maintenance like oil changes.
- You’ll be driving the vehicle when the least amount of trouble exists in the vehicle.
- You needn’t worry about value changes, hassles of trade-in, or trying to sell the vehicle.
- Advanced safety systems are part of the lease payment.
- When the term is done, you just drop off the vehicle.
Leasing Disadvantages
When you reach the end of the term, then you must give the vehicle back to the dealer. This isn’t the only disadvantage, there are also the following to consider:
- When you lease vehicles one after another there are never ending payments,
- At the end of the lease term, you may have paid more than the financing costs, due to depreciation.
- You have limited mileage allowance per the terms of the lease, if you exceed that amount you pay extra for overages.
- If you do not take care of the vehicle, you end up paying extra fees for excess wear and tear.
- You still have to pay for expendable items like tires, and higher end vehicles mean higher costs.
- If you dislike the vehicle and you want to return it, you pay excessive fees for early termination.
- There may be fees at the end of the leasing period.
- You must bring it back in the shape it was when leased, so little modifications can be made.
In making your decision, weigh your options well. Come by or call Stanley Ford McGregor and get details for leasing and buying your next vehicle.
