Lease a Vehicle Vs. Buying a Vehicle
Which works best for you: A car loan or a lease?
Should you get a car loan or a lease? Here's advice that might help:
At Marty's GMC in Kingston MA, we know many of our customers have questions about which financing method to use for their next SUV, truck or sedan. You might naturally be interested in getting a loan, which is the most common way to handle it. But maybe you've heard about leasing a car and you've wondered what that's all about. Both have upsides and downsides, so let's look at a few of the differences.
Some advantages of getting a car loan
This, of course, is the traditional approach and, honestly, it's the best solution from a long-term standpoint for most people. By qualifying for a car loan, you get the opportunity to build real cash value in the car you're buying. As you make your monthly payments, you're gradually building an ownership share in that vehicle – like a savings account in the car you drive every day. That's money you can use someday to help buy your next car.
Other loan advantages
By making your loan payments on time, you're creating real cash value in the vehicle. You're also helping to build your credit score. The higher your credit score, the easier it will be to qualify for a car loan in the future. Good credit also helps you qualify for even more important future loans like the mortgage you'll need to buy a home. A strong credit score (about 670 to 739) helps you pay lower interest rates on future loans.
Some challenges with a car loan
A car loan usually requires a hefty amount – typically about 20% of the price of the car – as a down payment. Any of our great customers from Middleborough or Plymouth, MA who don't have that much cash available might see that as an obstacle. Some people may have trouble qualifying for a car loan and that's something we can help you with. In addition, a typical monthly car loan payment is usually higher than a lease payment for the same vehicle.
Some advantages of leasing
The most obvious benefit of a car lease is the one we just mentioned: Your monthly lease payments would almost certainly be lower with a lease than with a car loan. What's more, the upfront payment – or "amount due at signing" – is often less than the down payment required for a car loan. You might even find a "nothing down" lease special. At the end of your lease, you just return the vehicle to us and pay for any lease-end charges.
Other lease advantages
When your lease is concluded, you don't have to go through the time, expense and hassle of selling the car you've been leasing. For our valued lease customers in nearby communities like Duxbury and Carver, MA, we take care of that for you. After you drop off your lease vehicle at the end of your lease and cover any charges, you'll have several options including leasing another new car, buying the vehicle you leased or buying another car.
Some downsides when you lease
We believe the biggest downside is the fact that, with a lease, you'll never own the car and you aren't building any cash value with your monthly payments. You're essentially just "renting" the vehicle for as long as the lease contract lasts: Usually 36 months. A lease limits the number of miles you can drive every year without having to pay an excess mileage fee. You also have to pay for any excess wear-and-tear at the end of your lease.
See our finance specialists to learn more
We'll be happy to explain more about the pros and cons of a lease vs. a loan. Talk to the friendly, helpful experts in our finance center to get the extra knowledge you may need and arrange for a test drive soon at Marty's GMC in Kingston MA.
Should you get a car loan or a lease? Here's advice that might help:
At Marty's GMC in Kingston MA, we know many of our customers have questions about which financing method to use for their next SUV, truck or sedan. You might naturally be interested in getting a loan, which is the most common way to handle it. But maybe you've heard about leasing a car and you've wondered what that's all about. Both have upsides and downsides, so let's look at a few of the differences.
Some advantages of getting a car loan
This, of course, is the traditional approach and, honestly, it's the best solution from a long-term standpoint for most people. By qualifying for a car loan, you get the opportunity to build real cash value in the car you're buying. As you make your monthly payments, you're gradually building an ownership share in that vehicle – like a savings account in the car you drive every day. That's money you can use someday to help buy your next car.
Other loan advantages
By making your loan payments on time, you're creating real cash value in the vehicle. You're also helping to build your credit score. The higher your credit score, the easier it will be to qualify for a car loan in the future. Good credit also helps you qualify for even more important future loans like the mortgage you'll need to buy a home. A strong credit score (about 670 to 739) helps you pay lower interest rates on future loans.
Some challenges with a car loan
A car loan usually requires a hefty amount – typically about 20% of the price of the car – as a down payment. Any of our great customers from Middleborough or Plymouth, MA who don't have that much cash available might see that as an obstacle. Some people may have trouble qualifying for a car loan and that's something we can help you with. In addition, a typical monthly car loan payment is usually higher than a lease payment for the same vehicle.
Some advantages of leasing
The most obvious benefit of a car lease is the one we just mentioned: Your monthly lease payments would almost certainly be lower with a lease than with a car loan. What's more, the upfront payment – or "amount due at signing" – is often less than the down payment required for a car loan. You might even find a "nothing down" lease special. At the end of your lease, you just return the vehicle to us and pay for any lease-end charges.
Other lease advantages
When your lease is concluded, you don't have to go through the time, expense and hassle of selling the car you've been leasing. For our valued lease customers in nearby communities like Duxbury and Carver, MA, we take care of that for you. After you drop off your lease vehicle at the end of your lease and cover any charges, you'll have several options including leasing another new car, buying the vehicle you leased or buying another car.
Some downsides when you lease
We believe the biggest downside is the fact that, with a lease, you'll never own the car and you aren't building any cash value with your monthly payments. You're essentially just "renting" the vehicle for as long as the lease contract lasts: Usually 36 months. A lease limits the number of miles you can drive every year without having to pay an excess mileage fee. You also have to pay for any excess wear-and-tear at the end of your lease.
See our finance specialists to learn more
We'll be happy to explain more about the pros and cons of a lease vs. a loan. Talk to the friendly, helpful experts in our finance center to get the extra knowledge you may need and arrange for a test drive soon at Marty's GMC in Kingston MA.