A lease and a purchase are two similar yet slightly different methods of financing a vehicle.
What Is The Same?
- For the most part; Lease and Loan terms are both evaluated the same way when it comes to credit worthiness.
- You have the option to pay off or trade in both a purchase and leased vehicle at any time.
- Your monthly payment goes down the longer your finance term is. Usually a 3 year term is less per month than a 2 year term; a 4 year term is less than a 3 year term, ect…
- You don’t actually own anything until you have paid off the remaining balance on your purchase or lease. (Don’t believe it? Stop making your payments and see what happens.)
- The amount of miles you drive affect how much you pay to drive your vehicle. A vehicle with higher mileage is worth less than the same vehicle with lower miles. Even when you purchase a vehicle and then trade it in, you still pay for the miles you drive in the trade in value of your vehicle.
A lease simply allows you to account for your specific needs for mileage and usage. Whether you drive 5,000 miles per year, or 50,000, a lease is the only method to customize those differences. Let us help you decide on the Smartest Finance option for you today!
What Are The Differences?
When you purchase a vehicle you pay 100% of the vehicles value over the term of the loan. This results in your payments being higher than they would be on a comparable term lease. When leasing a vehicle you pay only for the portion of the vehicle you use (the depreciation). Though people that drive less miles per year pay less than those who drive more miles, even higher mileage drivers will save money with lower monthly payments.
Once you’ve made the final payment on a purchase you own the vehicle outright.
Once you’ve made the final payment on a lease, you don’t own the vehicle, but you do have options. (Options include: purchasing the vehicle for a pre-determined value, trading or selling the vehicle, or turning the vehicle back into the bank.
What Is Best For You?
If you like to drive a newer model vehicle and also like to trade in your vehicle every 2-5 years, then leasing is a great option for you. If you are ok driving a slightly older model vehicle with higher mileage and don’t mind keeping it for 5 years plus then a purchase may make the most sense for you. Here is an example of how your equity position and payoff would compare when looking at a purchase VS lease.
In the above example the lease payment is $312.50 - or $50% less than a purchase.
The Question You Have To Ask Yourself
Would I rather invest an additional $312.50 per month into a vehicle that I know is going to continue to depreciate, or can I find another place (i.e. bank account, investment account, furniture, home improvements, vacation, or simply cash under-the-mattress) to use the money for?
Smart Auto Leasing takes pride in their ability to help facilitate a purchase or lease, any make - any model, new or used.
Let a Smart Auto Lease & Finance Manager help you make the SMART Decision today!
Smart Options. Smart Pricing. Smart Decisions.
Give us a call today at 214-BE-SMART (237-6278)