Should I Lease or Finance My New Car?
Deciding between financing or leasing your new car can be a tough call to make without knowing all the facts. Surely, financing a new car allows you to keep the car until you decide otherwise, but at higher monthly costs, while leasing can charge cheaper monthly payments, your car will have to be returned.
Each option has its set of benefits and drawbacks, so it is best you get familiar with both so you can make a decision that does not land you under a financial burden.
Leasing has a reasonable amount of benefits, mainly the fact that monthly payments will be lower as you are paying for the difference between the car's value before and after using it. The main benefits of leasing include:
1. You will be driving with a peace of mind
When you lease a car, you are borrowing it during its optimum conditions, so you will not have to worry about any surprising breakdowns.
2. You will be driving a new model
Dealerships usually lease new car models that are covered by an extensive manufacturer's warranty, so in the case you do experience any unexpected breakdowns, you won't have to worry about paying for repairs.
3. You will get some extra benefits
Car leasing will probably provide some extra benefits like free roadside assistance, free oil changes, and other scheduled maintenance.
4. You will drive a new model that you couldn't afford otherwise
As we previously mentioned, you will probably be borrowing a new car model to drive that is better-equipped with features at a lower monthly price, which you might not afford if you were purchasing.
5. You won't have to worry about depreciation
Because you won't have ownership of the car, you won't have to worry about its depreciation value for trade-ins or selling.
6. You simply drop off the car when your lease is over
At the end of your leasing contract, you will not have to deal with the troubles of keeping the car or its future expenses, so you just drop it off at the dealer.
As appealing as leasing a car may be, it does have its own disadvantages:
1. Endless monthly payments
We established that leasing a car is cheaper than purchasing, but if you keep leasing cars after cars, your monthly payments will never come to an end. In the long run, you could end up paying more monthly than you would have for purchase.
2. Limited mileage
Leasing contracts usually come with a defined number of miles that you can drive. You could be charged extra for each additional mile, so you will need to be careful with how much you drive and be sure to read the fine print.
3. Extra charges
If you do not keep the car in good condition, you could be charged with wear and tear fees when you return it. Moreover, you could also be charged with early termination fees if you get out of your lease earlier than its due date. Some dealers or contracts may also require you to pay the fee upon returning the car as well.
To simplify the comparison of both options, have a look at the table below:
You won't have title ownership with a lease contract
Your car will be registered in your name, and you will be the sole owner. (Unless you sign a co-owner)
Monthly payments, refundable security deposit, acquisition fee, down payment, taxes
Cash price, down payment, taxes, registration, and more
Lower monthly payments
High monthly payments
Pre-set number of miles you can drive
No room for customization, as you must return the car in the same condition; you got it
You can customize it to your heart's desire.
Now that you have all the facts regarding both options, you can make an informed decision as to what suits your needs and budget best. If you want to keep driving new cars every couple of years, then leasing is your best option. But if you want to own a car and keep it for longer, financing can be better for you but at the cost of higher monthly payments.
As we promised earlier, here are our top three dealership recommendations that will help you lease or finance the car you want.
For our top recommendation, we present you with CarMax. It is by far one of the best and largest auto dealerships in the U.S, with over 55,000 vehicles to shop from. The dealership has earned an A+ rating and accreditation from the Better Business Bureau, which justifies its well-received reputation and excellent services.
Shopping for a vehicle with CarMax will offer you the following benefits:
- No haggling buying experience
- Financing is available for any car they sell
- A 5-day money-back guarantee
- Each car comes with a complimentary 30-day warranty
- Wide variety of makes, models, and model years
CarMax is a great dealership to finance through, as it has its own finance division in addition to other third-party lenders like Capital One, Chase Bank, and Ally Auto. So you will be offered many auto loans offers at good rates.
2. Bev Smith Kia
Our second best dealer recommendation is Bev Smith Kia. For 60 years, it has continuously delivered the best automotive services in the industry as it is accredited and rated A+ by the Better Business Bureau.
As for those services, Bev Smith Kia offers the following:
- New & used car purchase
- Car leasing
- Trade-in and selling
- Service and parts
- 10-year/100,000-mile warranty
With this dealership, you can borrow up to $60,000 for financing, and your loan term will be customized according to your credit score and financial situation.
DriveTime is our third car dealership recommendation. It has 130 locations across the U.S, with inventories packing over 11,000 cars. It is also highly rated and trusted by customers as it also fairly earned its A+ rating and accreditation from the Better Business Bureau.
Buying your new car from DriveTime will provide you with the following benefits:
- 5-day money-back guarantee
- Basic warranty
- DriveCare Program
- Powertrain coverage
- GAP Coverage
- 99% approval odds
DriveTime will personalize your auto loan deal to your credit score and financial status as it requires no minimum credit score. You will be able to borrow up to $35,000 and trade in your car for credit.
To summarize, these are the best Car Dealership in 2021…
Off Lease Only
- Multiple vehicle protection plans
- Auto financing for all credit kinds
- Fast & secure credit application
Yonkers Auto Mall
- Lifetime Powertrain Warranty
- CarFax Certified Pre-owned Vehicles
- $300 referral award
- Military discounts and offers
- In-house financing
- Comprehensive maintenance services
- Financing with Capital One
- Kelley Blue Books® cash offer
- Vast inventory of used and pre-owned vehicles.
- Finances everyone
- Refer a friend program
- 7-day return policy and money-back guarantee