Buying vs Leasing a Car

April 13th, 2021 by

When you’re ready to park a new car in Cedar Falls, IA, come to Community Motors. We carry a wide selection of Chevrolet sedans, hatchbacks, crossovers, SUVs, and trucks to suit your driving needs. When you’ve made a choice, you can then decide whether to buy or lease your vehicle. Either option has its advantages and disadvantages.

Buying

The primary advantage of buying a vehicle is after you’ve made all the monthly payments, you own it and can drive it for as long as you want without making additional payments. You can customize both the interior and exterior to your heart’s content, and take your car anywhere that you want to go. You do not have to worry about any wear and tear except how it may affect the resale value. When you’re ready to get a new car, you can either sell or trade-in your current one, or donate it to charity for some tax deductions.

Unless you’re paying the full cash price for your vehicle, you do have to qualify for a loan, which entails a credit check. If your credit is poor or nonexistent, it may be difficult or impossible for you to finance your purchase. Installment payments are generally higher for a purchase than they are for a lease because you are paying for the entire price of the vehicle.

Leasing

Leasing a vehicle means that you are borrowing it for a period of time that can range from 12 to 60 months, although 24 to 36 months is about average. Your monthly payments are lower because instead of taking care of the entire cost of the vehicle, you are only paying for the depreciation over the time that you’re using it. At the end of the lease, you don’t have to worry about selling or trading in the vehicle. You can just walk away with no obligation or sign up for another lease. In this way, you’ll always be driving a late model vehicle with all the latest amenities and safety features.

The disadvantage of a lease is that you never own a vehicle and will be paying every month for as long as you want to drive. You cannot customize the vehicle in any way and may owe extra money for any damage beyond expected wear and tear. You’re also limited as to the number of miles that you can drive per year and you will pay extra if you go over those miles. Where you can take your vehicle is restricted with many not allowing trips to Canada or Mexico. Ending the lease early can leave you with extra charges.

Your Credit Score

Whether you decide to buy or lease, dealers will check your credit score, which is a number ranging from 300 to 850 that indicates your monetary responsibility. A number above 800 is considered excellent and gives you the best terms. Scores below 580 are poor, which may make it difficult for you to score any kind of financing. Most dealers like to see scores above 700.

You can find out your score by looking at your credit report. By law, you are entitled to a free credit report for free once a year from each of the big three credit bureaus: Equifax, Experian, and TransUnion. You can call each of the companies individually for your report or order it from AnnualCreditReport.com.

Pre-Approval

When you buy a car, you can apply for a car loan at our dealership. While we try to approve financing as quickly as possible, you will still have to wait while we check your credit. If you want to avoid waiting, you can get pre-approved before you select your vehicle.

To get pre-approved, fill out our convenient online form. You can get an estimate of your monthly payments using our online Payment Calculator. If you have questions, you can ask them through the handy Char box or by phoning our Finance Team. You will know what you can afford in advance and can then restrict your browsing to vehicles within your price range. You’ll be able to get in and out of our dealership faster because we won’t be waiting for financing.

Posted in Uncategorized