Lease Information

Is Buying or Leasing Better?

It is a classic argument: should you buy your vehicle or should you lease it? There are some strong arguments on both sides of the coin, and many folks lean towards one or the other. Here at Chrysler Dodge Jeep Ram Franklin, however, we don't see it as one or the other; we feel that both methods offer great possibilities for the person in the market for a new vehicle; it just depends on what they are looking for.

Advantages of Buying

By buying a vehicle, you are accepting a term loan that you must pay off at the agreed-upon point. In addition, you will have a down payment at the outset. This helps in a number of areas:

• Ownership - At the end of the agreement, the vehicle is yours to do with as you please, including selling it or driving it for a long period of time. At the end of a lease, you must either return it or negotiate a sale. On top of that, you can sell the car when you choose, while in a lease, you have that car until the end of the lease and may pay a penalty for an early return.
• Mileage - With an owned car, you can drive for as many miles as you like, while a leased vehicle will have mileage limitations that, if you exceed, will result in you having to pay additional fees.
• Customization - When you own a car, you can change its appearance however you like. With leasing, any changes you make must be reversible, as your lease will generally state that the vehicle must be turned in with the same features and appearance as when you got it.
• Maintenance - When you buy a car, you are free to maintain it as you like, including working on it yourself and, if you want, skipping some maintenance if you feel it isn't necessary. With leasing, you must follow the maintenance recommendations set forth in the lease, or you will end up owing fees when you return the vehicle.
• Lower Over All Cost - Provided you stick with a vehicle for more than five or six years, compared to the 3-year lease cycles most makers offer, your total cost at the end of your loan, minus the resale value of your vehicle, will almost always be lower than leasing. If you plan on using a vehicle for seven or more years, buying is generally the best financial option.

Advantages of Leasing

When you lease a vehicle, you are essentially getting a long-term rental where you aren't paying off the whole car, just the portion you are using. As with buying, you will have an upfront payment and monthly payments, but they will be slightly different. Leasing features perks, including:

• Turnover Ability - Leases only run for a few years, so if you like being on the cutting edge of the latest technology and you enjoy having a new automobile every few years, leasing offers an easier way to turn over from one vehicle to the next.
• Lower Up-front Costs - For buying, this includes a down payment, taxes, registration, and other fees. Often, the down payment is cheaper for leasing versus buying, particularly if you have poor credit.
• Lower Monthly Payments - In a lease, you are essentially paying the monthly depreciation of the vehicle, plus taxes and fees. This means that monthly payments will be lower as, when buying, you are paying the entire value of the vehicle off.
• Protection Against Unexpected Depreciation - Rarely cited in the general discussion of the two options, this can be a big advantage to the person leasing the car. Your lease terms are set in stone, so if there is unexpected depreciation brought on by a reduced market for the vehicle, it won't be a burden on the person doing the leasing; you're still only paying the agreed-upon amount. Conversely, if the vehicle holds its value better than expected, you may also be able to get a deal at the end of the lease when you have an option to buy at a price that may be lower than the actual value of the car.

In the end, there is no "better" or "smarter" way to get a new vehicle, it all depends on the choices of the individual. Whatever you choose, our finance department here at Chrysler Dodge Jeep Ram will always work hard to provide you with the best financing opportunities available. Stop in and chat with one of our team members to find out whether buying or leasing suits you better!