Buying vs. Leasing - Fargo, ND

CorwinToyota-BuyOrLease-WebBanner999x333.jpgYour research is done and you are ready to check out your next car at Corwin Toyota, but you aren't sure whether you sure buy or lease a new car. Well, there are differences in buying vs leasing, and each has its benefits. It all depends on what suits you more. Check out our buying and leasing pros and cons to see which one is better for you.

Buying Pros

The car is yours. After you have finished paying off the loan, the car will officially be yours, and any money you make off of the resell of that car will go straight into your pocket. Also, some people take a certain amount of pride in owning a car.

Insurance costs tend to be lower. When you purchase a car, insurance rates are usually lower than if you lease a car.

There are no extra fees that go along with owning a car. You are free to drive the car as many miles as you want, free to accidentally spill coffee without worry, or free to take a pet for a car ride not having to considered what happens if Fido chews through the seatbelt.

Buying Cons

Monthly payments are higher. With buying a car, monthly payments tend to be higher because you are trying to pay it off in a certain amount of time, whether that is a three, five, or seven-year loan.

Depreciation affects value. With purchasing a car you have to consider the value of the car. Over the course of the first three years the car will lose roughly 47 percent of its value, and then it will lose about another 24 percent over the next three years.

Leasing Pros

Down payments are lower. Dealerships will often require a much smaller down payment for leasing a new car than if you were to purchase one. In fact, with certain deals there may be no down payment whatsoever.

Constantly upgrade your vehicle. When you lease a car you can simply turn it in at the end of your lease term and apply for a new car. This way you can get the newest car updates every couple or few years.

Vehicle services should be covered. Since you only lease a car for up to a few years, the warranty on it will be valid for the entire time you have it. That means that most services will be covered and you won't have to pay out of pocket.

Leasing Cons

Extra fees can add up. Leasing allows you to drive a certain amount of miles over the course of your term. For every mile that you go over there is an extra fee. Other fees can include unusually wear and tear, early termination, and customizing.

It's essentially just renting. The car is never actually yours, and you are essentially just renting it for an extended amount of time. This can be a drawback at some points because you never feel like the car is actually yours.

Now that you know what the difference is between buying vs leasing, it is time to make the educated decision. Come to Corwin Toyota in Fargo, ND where our Finance Department can help you further!