So, you found your dream car and now you’re asking yourself how you want to pay for it. The decision to buy or lease a vehicle depends on your own individual needs and other monthly costs, so it’s important to consider your options carefully before jumping into anything. 

We at Delaney Chevrolet of Indiana are here to make sure you have all the information you need so that you can decide if buying or leasing is the best option for you.

Leasing a car means you don’t pay the full value, rather you only pay for the depreciation of the vehicle during the term of your lease, plus interest and fees. After the term ends, you must return the car to the dealership and decide whether to walk away, buy it, or lease a new car.

Fast Facts: Leasing a Car

So, the formula goes:

Capitalized Cost – Residual Value + Interest (based on Money Factor) + Fees = the Amount You Pay When Leasing

Now that we’re more familiar with what a lease is, let’s get practical with a list of pros and cons: 

Option of new car every few years

You get to drive the latest safety and driving technology, with potentially better fuel economy 

Lower monthly payments than a loan

You will always be covered by the factory warranty during your lease

Lower (or no) down payment

At the end, you just drop it off at the dealership. No hassle of selling or haggling your old car’s value

You don’t own it – you must return it, and if you decide to keep leasing, you will always have a monthly payment

Mileage limitations

You can’t customize it

Excess wear-and-tear charges

Early termination fees are very costly

No cash to use for your next lease or purchase. In fact, you may be paying even more charges and fees when you do return it 

Although the lower monthly payments of a lease may seem attractive, it might actually end up costing you more than buying would in the end. You must consistently maintain the condition of the vehicle and abide by the many contract terms, or you’ll be facing steep penalties and fees. Plus, you won’t make anything back when you return it to the dealership like you would if you were to trade-in or sell a purchased vehicle.

Some helpful tips to avoid extra costs are questioning what “normal wear” means to your car dealership, not procrastinating on maintenance, keeping a close eye on your mileage, and studying the lease terms. Essentially, if you want to lease, you have to be diligent. If that isn’t you, maybe buying would be a better option.

Buying a car means you pay the entire negotiated price of the vehicle, and therefore you own it. You may pay in cash, in financing, in the value of your trade-in, or a combination of them all. 

Fast Facts: Buying a Car

Again, let’s get practical. What are some pros and cons of buying a car?

You own it – you can use the equity however you please and don’t have to worry as much about wear-and-tear

No mileage limit

Customize it however you want

Once the loan is paid off, no more payments!

You can build up trade-in or resale value 

Sell it whenever you want (no binding contracts or early termination fees)

You’ll be driving the same car until the wheels fall off or you decide to sell – no new car every couple of years

Higher down and monthly payments

Unexpected post-warranty repair costs

You pay interest on the entire loan balance

You’re responsible for trading or selling your old car

Uncertainty about the vehicle’s future worth

Even though the immediate costs are much higher when purchasing a vehicle, you may be able to save more money over the long term this way. Plus, you’re free from the restrictions of a lease like mileage caps or customization, and there is no risk of lease-end charges. However, the finance charges you would pay for trading-in early on a long-term loan may make it so that leasing would have been a better option. So, do the math. Take the time to read the fine print and consider your present and future needs.

Are you pinching pennies or have tons of other monthly costs? Do you value being on the cutting edge of technology and trying new things every few years? Are you sparing in your mileage and use of your vehicle? Maybe leasing is the right option. But remember that your monthly payments won’t end in ownership. Instead, it will most likely mean another lease and more monthly payments. 

Do you live in a crowded city, drive far distances, or have an overall higher potential to dings, bumps, and excessive wear and tear? Do you wish to customize your car or drive it for a long time? Are you willing to take on a sizable monthly expense? Perhaps think about owning your next vehicle. 

We don’t have the magic answer for which option is the right one for you, but asking the right questions will bring you closer to finding it. Consider consulting with one of our sales and leasing specialists at Delaney Chevrolet of Indiana to help determine what will work best with your lifestyle.

If you want to learn more about leasing or buying a vehicle at Delaney Chevrolet of Indiana, don’t hesitate to contact one of our talented staff or visit us at our dealership located at 626 Water Street, Indiana, PA 15701.