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Leasing vs Buying at Davidson Nissan


Leasing Versus Buying. The answer? It Depends.

Leases and loans are simply two different methods of automobile financing. One finances the "use" of a vehicle, the other finances the "purchase" of a vehicle. Each has its own benefits and drawbacks.               

It's not possible to simply say that one is always better than the other because it depends on your own particular situation and preferences.You must not only look at the financial comparisons but also at your own personal priorities of what's important to you.

Buying and Leasing are Different

When you buy, you pay for the entire cost of a vehicle, regardless of how many miles you drive it or how long you keep it. Monthly payments are higher than for leasing. You typically make a down payment, pay sales taxes in cash or roll them into your loan, and pay an interest rate determined by your loan company based on your credit score. You make your first payment a month after you sign your contract. Later, you may decide to sell or trade the vehicle for its depreciated resale or trade value.

When you lease, you pay only a portion of a vehicle's cost, which is the part that you "use up" during the time you're driving it. Leasing is a form of financing and is not the same as renting. You have the option of not making a down payment, you pay sales tax only on your monthly payments, and you pay a financial rate, called money factor, that is similar to the interest on a loan.  You make your first payment at the time you sign your contract - for the month ahead. At lease-end, you may either return the vehicle, or purchase it for its depreciated resale value. You may be charged a lease-end disposition fee.

Lease or Buy? What's Important to You?  What Are Your Priorities?

It's personal. All of us have different personal styles, objectives, and priorities - in cars, life and in finances. Car lease-versus-buy decisions must be made with your own lifestyle and priorities in mind. What's right for one person can be totally wrong for another.

LEASE - If you enjoy driving a new car every two or three years, want lower monthly payments, like having a car that has the latest safety features and is always under warranty, don't like trading and selling used cars, don't care about building ownership equity, have a stable predictable lifestyle, drive an average number of miles, properly maintain your cars, are willing to pay more over the long haul to get these benefits, and understand how leasing works, then you should lease.

BUY - If you don't mind higher monthly payments at first, like holding on to your cars, prefer to build up some trade-in or resale value (equity), enjoy the idea of having ownership of your car, like paying off your loan and being payment-free for a while, don't mind the unexpected cost of repairs after warranty has expired, drive more than average miles, prefer to drive your cars for years to spread out the cost, like to customize your cars, might have lifestyle or job changes in the near future, and don't like the risk of possible lease-end charges - then you should buy.

Still Have Questions? Please, let us help.