Should You Lease or Buy?While there may be several reasons why people consider leasing a car or truck from Mark Christopher Chevrolet Cadillac GMC Buick, three of the most common are: They enjoy driving a new vehicle every few years, they use the vehicle for business or they want the lower monthly payments typical of a lease.
Is Leasing a Car or Truck Less Expensive than Buying?
While the price of the vehicle may not be less expensive, the monthly payments for leased vehicles are typically lower than the monthly payments when you buy. This is because you are only paying for the part of the car or truck that you are using. In other words, you are paying for the depreciation on the vehicle over the duration of the lease. When you buy, your monthly payments reflect the entire purchase price of the vehicle. Because of this, people who choose to lease can often times lease a more expensive vehicle and have the same monthly payments as if they bought a less expensive vehicle.
What Other Costs are Associated with Leasing?
Similar to renting an apartment, costs associated with leasing a car or truck typically include first month’s payment plus a security deposit that is refundable. Often gap insurance, which covers the difference in price between the cars value and what your insurance company will pay if the car should be damaged or stolen, is also required. There may also be a mileage fee if you drive over the annual mileage limit set in your lease agreement. These upfront costs are usually not required when buying a vehicle. Other costs such as a down payment, sales tax (on the full purchase price), loan interest, and miscellaneous government fees usually come into play when buying.
What Happens at the End of My Car or Truck Lease?
When your lease expires, you pretty much return the vehicle to the dealership and walk away or discuss the option to purchase the vehicle from the dealership. Sometimes there may be end of lease costs for things like excessive mileage or scratches and dents that are considered beyond normal if you do turn the car or truck back in to Mark Christopher Chevrolet Cadillac GMC Buick. Additionally, when turning in a lease you usually don’t retain the same value as if you were trading in a car you purchased, and you can’t sell it to a third party without purchasing the balance of the value of the car. In other words, the trade in value of a vehicle you buy is usually worth more and you always have the option to sell your car or truck to a third party.