Buy vs. Lease

Shopping for a new vehicle can be quite daunting with everything buyers need to consider. Potentially, the biggest question is: should you buy or lease your next vehicle? Numerous factors go into choosing one over the other, as each customer’s needs and wants are not always the same. One of the easiest ways to think about the differences between buying and leasing is when you buy a car, it’s yours. You own it, which means it can be considered an asset, especially when it comes time to trade or sell your vehicle. Leasing is essentially renting a vehicle for a certain period of time with a limited amount of mileage the vehicle can be driven per year. At the end of the lease, you can either turn it back into the dealership or buy it outright as a used car. 

If you decide to buy a new car, your monthly payments will typically be higher. However, this will depend on your finance rate, the vehicle’s overall price, and how much money you put down as a down payment. You will also own your vehicle and be able to get out of it at any time. 

Leasing a vehicle usually results in lower monthly payments. However, that may come at the expense of a higher down payment. It is also more difficult to get out of a lease. There are ways to swap a lease for another, but we advise you to discuss that option with our finance department if that ever needs to happen. 

Leasing Pros:

• Leasing is great for people who don’t necessarily drive a lot per year, as the usual lease will allow about 10,000-15,000 miles per year. Although you can adjust that before you finish your deal, you can also add more miles per year to your lease at any time. 
• Most leases and the best leasing specials typically last for 36 months, which is three years. 
• You prefer to avoid making long-term commitments and instead like driving a car for 2-3 years and then turning it back in for something different or newer. 
• Leasing allows customers to worry less about running out of the original factory warranty before the lease is up. 
• You are always driving a newer car. 
• Your vehicle will have some of the latest and best safety features and driver-assistance technology that will not be outdated when you are ready to turn the vehicle in at the end of the lease. 
• Some business owners can take advantage of leasing certain types of vehicles and then turn them in accordingly and get something new in just a few years. 
• Some dealers and manufacturers cover a certain amount of regularly scheduled oil changes, which could be most, if not all, of the maintenance a leased vehicle will need. Many modern vehicles have an oil change interval of 7,500-15,000 miles. If you have a 10,000-mile-per-year lease, your vehicle may need, at most, one oil change per year. 
• You can negotiate a lease so long as it is not part of a manufacturer’s lease specials. 
• You will pay less in sales tax. 
• Some monthly, quarterly, or yearly lease specials may allow no money down to sign for the lease. 
• You could drive a more expensive overall car for less money per month than what you could afford to purchase. 

Leasing Cons:

• You do not own your car, and it can be more difficult and expensive to get out of a lease early. 
• While you can add extra mileage to your lease plan, you will sometimes have to pay 25 cents or so per mile added to your lease. However, if you go over your mileage without adding new mileage before you turn in your car, you can pay up to 75 cents or more per mile, which could mean quite a bit extra that you will owe when you turn in your lease. 
• If your vehicle has lots of dents, scratches, damaged wheels, bald tires, paint issues, and interior damage, you could be on the hook for some expensive repair bills. 
• Leasing contracts can be confusing to some because there are lots of figures, such as residuals, various percentages, and other numbers, that can all run together when looking at the paperwork. 
• In the end, a leased vehicle could cost you more than if you had purchased it if you add up any damage, mileage, and other fees you could incur when you turn it in. 
• A car typically depreciates more in its first 36 months than at any other time. This means that if you count the differences between buying and leasing, you could end up paying more over three years when leasing. 
• Any modifications done to the vehicle need to be taken off before you turn the vehicle in. 

Buying Pros:

• You enjoy long-term plans and don’t mind having something for 3-5 or maybe even seven years. 
• Every payment you make adds to the asset that you have. This means that the less you owe, the more of the car you own when you go to sell or trade it, which equates to positive equity. 
• While it isn’t always advisable to do so, you can take out an extended loan of up to eight years if you know you are keeping a car for that long to lessen your monthly payments. 
• It can be easier to negotiate a car for purchase over a lease, depending on the brand. 
• Putting more money down as a down payment upfront can lower your monthly payment. Again, this increases your positive equity in your vehicle, making it an overall asset. 
• Depending on the type and size of your vehicle, you could qualify to write the vehicle off on your taxes. 

Buying Cons:

• Purchasing a car is another expense, and buying a car, especially a new one, isn’t always the best option. Just because you can afford it doesn’t mean you should. 
• When attempting to buy a car, you give your social security number to one or more dealers, which impacts your credit score from them checking to see how much car you can afford, if you can buy at all. 
• Some buyers can easily get in the red with negative equity, meaning the vehicle is worth less than what is owed. 
• More and more banks are trying to lock buyers into longer and longer loans, which lowers your monthly payments, but it takes even longer to pay off the vehicle. Depending on your interest rate, you are only adding more money to what you pay in the end.
• While you can trade your vehicle in every three years for something newer, like with a lease, sometimes that isn’t the best strategy. Depending on your loan interest rate, APR, or the length of the term, you could be losing money every time you trade your car for another. 
• You can make more money selling your car outright, but it takes longer, and you have to deal with tire kickers when trying to sell a car yourself. 
• When the manufacturer’s warranty is up, maintenance costs will start to rise with the age of the vehicle. 

After learning the pros and cons of each, is it obvious which is best for you? While it may seem like one is better than the other, it truly does revolve around the buyer’s wants and needs for a vehicle. If you mainly work from home and don’t drive often, a lease may be the perfect solution. However, if you drive a lot, especially if you need to pick up your kids from school, take them to extracurricular activities, go to the grocery store, or make frequent out-of-town trips, buying will probably be the best option for you. 

Whether you are looking to buy or lease, the sales staff and service department at Bud Brown Volkswagen can help ensure you have all the relevant information to make an informed decision. 

At Bud Brown Volkswagen, we value our customers. You can find new Volkswagen inventory, including the VW ID.4, the all-new Atlas, as well as the GTI, and Tiguan, plus an unmatched collection of used car and SUV inventory at our dealership. Are you interested in leasing or financing your next vehicle? The Finance Department at Bud Brown VW can help you find the right lease offer or finance solution that fits your budget. We cultivate relationships with many banks, lenders, and other financial organizations to provide you with great options in purchasing your new vehicle. In addition to the comprehensive factory warranty that comes with your new vehicle, we offer extended warranty and protection programs to safeguard your investment. Get the best deals and specials available to you on a VW. Our knowledgeable sales staff wants to help you find the perfect fit in a new Volkswagen or used car. We can’t wait to welcome you to the Bud Brown family and help you find your new car or used vehicle. Your support and customer service doesn’t stop after you sign your deal. The expert Service Department at Bud Brown Volkswagen is always ready to help with any repairs or maintenance you might need to keep your vehicle running perfectly. Our Express Service Lane will get you back on the road quickly when you need basic maintenance, like an oil change or tire rotation. Would you like to make your new car all your own with personalized upgrades? Our well-stocked Parts Department has all of the authentic Volkswagen accessories you need for the best vehicle customization. Make your car, truck, or SUV uniquely yours to fit perfectly in your lifestyle. We are eager to help you on your car buying and vehicle ownership journey. Visit us today at Bud Brown VW!