Leasing vs Buying a Car
When it comes to buying or leasing a car, the options can feel overwhelming. We hope the information below will help you make an informed decision when you’re considering financing options for your next vehicle.
The basic difference between buying and leasing a vehicle is that, when buying a vehicle, you pay for its entire cost. When leasing, you pay for only a portion of the vehicle’s cost, which is the part you use during the time you are driving it.
Who Owns the Vehicle?
Buying: Whether you pay for the car with cash or finance it and make monthly payments, either way, it’s yours. If you’re financing a vehicle, you’ll need to meet the obligations required by the lender, like a certain down payment and timely monthly payments. The lender has the right to repossess your car if these obligations are not met.
Leasing: You do not own a leased vehicle. You’re paying for the use of the vehicle, but it is owned by the financial institution through which it was leased. This is why you usually pay less per month when leasing than you would if you were to purchase the car.
Buying: When buying a vehicle, the lender usually requires a down payment. If you currently own a vehicle, you can trade it in and use the equity toward your down payment. The amount of your down payment is based on the lender’s requirements and your credit score, and sometimes special financing offers are available to reduce this amount as well.
Leasing: Leases frequently do not require any type of down payment. The upfront costs before driving the car off the lot are usually: the first month’s payment, a security deposit, and any fees and taxes. However, you may voluntarily pay more upfront to reduce the number of your monthly payments.
Buying: Your vehicle will be worth whatever you can sell it for, which is largely dependent on how well it is maintained. Be sure to protect your investment with regularly scheduled maintenance by a factory-authorized facility! Honda vehicles are renowned for their incredible resale value across the full range of models, which makes Honda cars great choices for purchasing.
Leasing: The future value of a leased vehicle is the concern of the financial institution unless you decide to purchase it during or after the lease term. Do be aware of any mileage limits or wear-and-tear guidelines to avoid paying extra money at the conclusion of your lease.
When Payments End
Buying: Once you’ve paid off what you owe on your contract, the vehicle is 100% yours. The lending institution will send you a Lien Release as proof that the vehicle has been fully paid and is now owned exclusively by you.
Leasing: Most people return leased vehicles at the end of the lease term, but some like to purchase the vehicle or trade it in before the lease is over. If you’re interested in different leasing options, please ask your salesperson before signing any paperwork, and we will make sure your lease is structured in the way that’s best for you.
We hope this information has been valuable to you, and please contact us at any time if you have additional questions!
While great effort is made to ensure the accuracy of the information on this site, errors do occur, so please verify information with your customer service representative.