How to Know If You Should Buy or Lease Your Next Car
At Pat Peck Nissan, we’re often asked about the benefits of buying vs. leasing a car. Generally, there’s no wrong answer to this question. Each option has something different to offer, depending on your individual situation.
To help Gulfport, Pascagoula, and Waveland area drivers decide which fits their needs, we broke down the pros and cons of buying vs. leasing into the four categories below…
1. Buy vs Lease: Payments
Whether you buy or lease may be determined by how much of a monthly payment you’re willing to pay, and how much money you’re prepared to put toward the down payment.
Car buyers often have a higher down payment and monthly payment than lessees. One of the reasons for this is because when you buy a car, you pay for the entire cost of the car.
When you lease, on the other hand, you’re only paying for the value of the vehicle’s expected depreciation over the course of the lease. In other words, you’re not paying for the whole car, just a percentage of it. So, your monthly payments, and your down payment, will likely be less.
2. Vehicle Ownership
The main benefit of buying is that, at the end of your loan, you own a car, which is a sizable asset. And, once you’ve paid off the vehicle, you won’t have any more monthly payments to make.
At the end of your lease, however, you won’t have any equity in the car. Your only options will be to start a new lease or buy out your current lease. Either way, your monthly payments will continue.
3. Buy vs Lease: Wear & Tear
Lessees are at a disadvantage if they want more control over how they treat their vehicle. Leases usually come with a mileage limit, so you’ll have to watch how far you drive. All customizations need to be removable, as well. And, if you decide to end your lease early, there will likely be a fee.
Car owners, on the other hand, have the flexibility of choosing what they do with their car. They can hold onto it for as long as they want, sell or trade it at any time, rack up the miles, and customize more freely.
4. Upgrades & Tech
One advantage lessees experience is the ability to drive a new car every couple of years, complete with that year’s newest technology and safety features. The lower monthly and upfront costs also allow for upgrades to a higher trim level, if desired.
Car buyers, however, may find that over time, the technology in their car will begin to feel outdated. They’ll also be responsible for selling or trading in their vehicle should they opt for a newer model later. This is a process that lessees don’t have to worry about.
Buy vs Lease: Do What’s Right for You
If you’re in the Gulfport, Pascagoula, or Waveland area, and are still unsure whether buying vs. leasing is right for you, visit our finance center at Pat Peck Nissan. Our experienced staff will work with you to find the right financing solution for your individual situation.
Contact our finance center today to learn more.
Besides selecting which Nissan you want to buy, the most important decision you’ll have to make is how you want to purchase your car: buy (financing) or lease (renting).
Each purchase option has its pros and cons, good and bad, ups and downs. When selecting how you want to buy your next car, it will depend on your budget and the amount of “freedom” you want with your car, so to speak. It’s like deciding if you want to mortgage a house or rent it.
The Beauty of Buying
When you buy a Nissan, there are a number of advantages you’ll enjoy compared to if you had leased the vehicle. However, there are some downsides as well. Depending on what your needs are, the upside may be much higher than the downside. Here are some of the benefits of buying a Nissan:
- It’s yours: When you buy/finance a car, it is your property and you can do whatever you want to it. Whether you want to change the exterior or interior; such as paint, wheels, modify the body or even put in a custom stereo system – you can, because the car is yours.
- No limits: If you’re a person who loves to drive; whether going on long-distance road trips or driving on some lonely windy roads just for fun, there is no limitation on where or how far you can go. Drive only 10,000 miles in a year or 100,000 miles. There are no limits.
- A committed relationship: Do you love cars? Do you buy a car because it speaks to your heart and you can see yourself in a lasting and loving relationship with your vehicle for years to come? If so, then buying is definitely for you.
As with everything in life, there are also downsides to financing that need to be considered before you make your final (and big) decision and decide if buying is right for you:
- A liability, not an asset: Unless you’re buying a classic Ferrari or some other type of rare car, when you purchase a new vehicle it is almost guaranteed the value of the car will drop as soon as you drive it off the lot. If you ever decide to sell the car, you will most likely get less money for it than what you paid.
- Maintenance: While Group 1 Nissan offer generous warranties on our new cars, if you are going to own the car for the long haul, eventually the warranty will run out and you will have to pay for vehicle maintenance out of your own pocket.
The Beauty of Leasing
Leasing a Nissan has its own pluses and minuses, which, depending upon your needs and your budget, might be a better option compared to financing your next car. Leasing is very much like renting an apartment: you pay a security deposit upfront (down payment) and then make fixed payments for an agreed upon length of time, at which point you return the car. Here are some of the benefits of leasing a Nissan:
- Less money, less problems: When leasing a Nissan, typically your down payment and monthly payments will be lower compared to if you financed the vehicle (depending upon length of the lease and your credit), leaving you with more money in your pocket.
- Peace of mind: Don’t worry about expensive repairs or maintenance since most leases usually come with warranties that last for most of the lease agreement.
- Switch it up: Are you a person who wants the latest and greatest in automotive technology and engineering? If so, leasing may be the perfect option for you because after the end of your lease agreement, you can bring back the car and get a new lease for the newest model that you want.
Just like with buying a Nissan, there are some aspects of leasing that might make this purchase option not the best choice for certain drivers:
- Limited mileage: As part of the lease agreement, you can only drive your leased Nissan for a pre-determined amount of miles (usually between 12,000-15,000 miles a year) a year. If you are just using the car to commute to work and run errands around town, you should be fine. If you’re a driver who likes to take cross country road trips frequently, leasing might not be the best option for you. If you drive more miles per year than the lease agreement states, you can face extra fees for the increased mileage.
- No customization: When you lease a Nissan, you can’t make any changes to the car – period. For most drivers, this is no problem. A lot of people just want a car to get them from point A to point B. But if you’re someone who likes to upgrade the performance of the car or the looks of it, buying is the better option.
As you can see, both purchase options have their merits but which one you ultimately choose depends on what works best for your budget and driving needs. Fortunately, everyone at Group 1 Nissan is here to help you find which option is optimal for you.