Buy vs Lease

When the time comes for a new car, truck, or SUV, you may wonder if you should buy or lease it. Both options are viable; you just need to know how you’ll use the vehicle. Our Classic Toyota dealership team in Tyler, Texas, has written this comprehensive article on the pros and cons of financing a new car versus leasing a new one to help you decide.

Financing vs. Leasing

 

When planning to buy a new car, you can either finance it through an auto loan or lease it. With financing, you’ll own the vehicle once you complete your payment terms, which typically take 36 to 60 months. On the other hand, when you lease a car, you get to use it for an agreed-upon period, usually 24 to 48 months, and then return it to the dealership.

At the end of the lease, you have a few choices: lease a new car, buy the one you’ve been driving, or stop leasing and purchase another vehicle outright. It’s essential to weigh the pros and cons of financing versus leasing and decide which option is best for your lifestyle and driving needs.

Pros of Financing

Financing a new vehicle has many benefits, including:

  • Car ownership:  When you finish paying off the auto loan, you’ll receive the vehicle’s title and become the legal owner.
  • Unlimited mileage: When you lease a car, you have restricted mileage. If you go over that mileage, you have to pay associated fees. If you finance a new vehicle, you can drive as many miles as you like. Unlimited mileage is ideal for those who take several road trips or have a long commute.
  • No extra fees for wear and tear: You won’t get charged for dings or scratches you may get while driving off-road or when parking in challenging spots.
  • You can modify or customize the vehicle: Because you own the car, you can add custom features such as a lift kit, change the suspension system, or add light bars.
  • Resell or trade in the vehicle whenever you want: You can sell your vehicle to the dealership or a private party if you want a different car. You can also trade in the vehicle and apply its value toward the down payment of a new one.

Cons of Financing

While financing a new vehicle has many benefits, there are a few cons, including:

  • Large down payment: Unless you trade your older car in, you’ll have to come up with a substantial down payment, with an average rate of 20% of the vehicle’s worth.
  • Higher monthly loan payments: Most auto loans require higher monthly payments than the average monthly lease payments. If your monthly finance payments exceed your budget, leasing may be better for you.
  • Out-of-pocket payments for maintenance and repairs: You’re responsible for paying for repairs and maintenance once your warranty expires.

Pros of Leasing

Leasing a new Toyota has several benefits, including;

  • Driving a new Toyota every few years: Leasing is an excellent option if you enjoy driving a new vehicle with the latest features and technologies. At the end of your lease, you can bring the Toyota back to our dealership and lease a new model.
  • Being able to afford a higher trim level: Most premium Toyota trims have a higher price tag. When you lease, you can often afford to drive a top-tier trim with attractive features such as leather upholstery, heated seats, and updated technology.
  • Not being responsible for repairs: Your leased Toyota is under warranty, which covers any repairs, saving you money.
  • Lower monthly payments: Because you’re not paying toward the vehicle’s principal, you’ll have lower monthly payments. If you’re on a budget yet still want the luxury of driving a new Toyota, leasing may be your best option.

Cons of Leasing

There are a few disadvantages to leasing a new vehicle, including:

  • Limited mileage: Your lease agreement contains a set mileage limit. If you exceed this limit, you’ll be charged extra fees for the additional miles driven.
  • Fees for excessive wear and tear: In most situations, you must return the leased vehicle to the dealership in pristine condition. If there’s damage to the car, you’ll have to pay fees.
  • Continuous monthly payments: If you keep leasing a Toyota, you’ll never own the vehicle and must continue making monthly payments.
  • Early termination fees: If you decide to terminate the lease contract early, you’ll probably have to pay fees that can be quite costly.
  • No customization allowed: You’re not allowed to make changes to the leased vehicle, so you can’t customize it.

Easy and Flexible Finance or Lease Options at Classic Toyota

Financing a new vehicle from our dealership is a breeze. You can start the process by using our online payment calculator to get an estimate of what your monthly payments may be. Then, complete the application, and one of our finance team members will get back to you to discuss the details. If leasing is the better option, our team will work with you to find lease terms you’re comfortable with.

Learn More About Buying vs. Leasing From Classic Toyota

Our finance team and sales team members invite you to stop by to learn more about the pros and cons of financing versus leasing your new Toyota. Whether you want a sleek hybrid Prius for daily driving, a rugged Tundra for off-roading adventures, or a Sienna minivan for family road trips, we have an extensive inventory of your favorite Toyota vehicles. We look forward to helping you decide whether to buy or lease your next car.