Everything You Need to Know About Leasing vs. Buying a Car

Leasing and buying are both great options when getting a new car, but they have differences every driver should consider before deciding which is best for them. Let’s look at the most important things you need to know when you want to buy or lease a car in Madison, CT.

The Process

When leasing, you head to the dealer, choose a car, and negotiate a price. You’ll need to calculate how many miles you’re likely to drive during your lease, and then you apply for the lease. Once your application is approved, you pay the up front costs, sign the paperwork, and your car is yours until your lease ends. At the end, you bring it back and pay any outstanding fees.

When buying, you apply for financing with various lenders to find the best deal. Once you’re approved and pick a lender, you pick a car, negotiate a price, do the paperwork, and the car is yours to keep. When you want a new one, you have to arrange to sell the old one.

The Cost

Leasing requires an up front investment of the first month’s lease payment, taxes, registration, title, a refundable security deposit, an acquisition fee, and potentially some other costs. When buying a car, you pay for the title, registration, taxes, and a down payment up to 20% of the vehicle’s value.

Monthly lease payments throughout your lease cover the vehicle’s depreciation and some fees. Car loan repayments cover the vehicle’s full value plus interest, and you’ll eventually pay this off and have no monthly payments.

The Limitations

Car leases typically have mileage limitations, and you can’t customize your car. There are no limits like this when you’re buying a car, but you may feel limited in what you can do if you don’t like your car. The main limitation when buying a car is the price. Because buying can cost more up front and every month, some people may find it difficult to afford to buy instead of lease.

The Pros When You Buy vs. Lease a Car in Madison, CT

Leasing

When leasing, you don’t have to apply for financing with multiple lenders. You never have to sell your car, either. Monthly and up front payments are often lower than with buying. This makes leasing great for convenience-lovers and people with tighter budgets.

Buying

Buying a car may have higher initial and monthly costs than leasing, but your payments stop after a few years. There are no mileage limits, and you can customize your car. This makes buying appealing for people who drive a lot, may want to upgrade parts of their vehicle, and intend on keeping their car long-term.

Are you interested in buying or leasing a vehicle? Visit Madison Chrysler Inc. in Madison, CT, to discuss your options.

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