Vehicle Financing
Should I Buy Or Lease?
If you find yourself unsure about the best route for your needs, don't worry – we're here to provide expert guidance!
The Difference Between Buying and Leasing
Choosing to drive a Ford is simple, but the decision between leasing and buying can be more challenging. Explore the advantages and disadvantages of both leasing and financing to make an informed choice that suits you best.
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Consider LEASING if you:
- If you can project your annual mileage needs for the next few years, leasing is a viable option with limited miles.
- If you take pride in maintaining a clean and well-maintained vehicle, leasing may be a great choice.
- If you love having access to the latest automotive innovations, leasing allows you to enjoy a new car more frequently.
- If having a vehicle under warranty is important to you, consider the benefits of leasing.
- If you value the convenience of returning your vehicle at the end of the agreement, leasing offers an attractive option.
Consider BUYING if you:
- If you enjoy driving or have a lengthy commute, opting to buy a vehicle is the ideal choice, providing unlimited mileage.
- Considering a substantial down payment? Purchasing a vehicle is a financially savvy option.
- Do you desire the ability to customize your vehicle with aftermarket equipment? Buying allows for easy personalization.
- If you plan on keeping your vehicle for an extended period, buying is a smart long-term investment.
- Seeking complete ownership of your vehicle? Choose buying, and once all payments are made, the vehicle is entirely yours.
Advantages & Disadvantages
| Leasing | Financing | |
|---|---|---|
| Upfront Costs | Upfront costs alone tend to be lower. | Upfront costs will be higher and you can expect to make a significant down payment. |
| Monthly Payments | Lower monthly payments, but higher finance charges compared to a vehicle loan | Monthly payments are typically higher than lease payments. |
| Maintenance | Leased vehicles come with maintenance coverage for routine services like oil changes and tire rotations. | Owners handle all maintenance, and extra services may be available for an added cost. |
| Wear and Tear | Maintain the vehicle's condition to avoid additional charges for excessive wear and tear, as specified in your lease agreement. | Wear and tear won't affect your loan but may reduce the vehicle's resale value, potentially costing you during a trade-in or sale. |
| Use/Mileage | Leases come with mileage limits, often around 10,000 to 12,000 miles per year. Exceeding this limit incurs additional charges, typically ranging from 15 to 30 cents per mile. | Unlimited miles, but excessive mileage may reduce resale or trade-in value. |
| Customization | Modifying the vehicle's appearance may breach the lease agreement, resulting in extra charges. | Vehicle owners can freely customize their cars. |
| Ownership | You don't own the vehicle; you make payments to use it during the lease, with the option to purchase it at the end. | You own the vehicle, make monthly payments, and it's fully yours once paid off. |
| End of Term | At lease end, you can return, buy, or trade the vehicle. | At the loan's end, you own the vehicle and have options to keep, sell, or trade it. |
FAQS
What is the main difference between buying and leasing a car?
Buying a car means you own it outright, while leasing involves paying to use it for a specific period, typically 2-3 years.
Which option is more cost-effective in the long run?
Buying a car is usually more cost-effective over the long term, as you build equity and eventually own the vehicle outright. Leasing often involves lower monthly payments but does not result in ownership.
What are the upfront costs associated with buying and leasing?
Buying may require a larger down payment and upfront taxes, while leasing typically involves lower initial costs, such as a down payment, first month's payment, and security deposit.
Are there mileage restrictions with leasing?
Yes, leasing agreements often have mileage limits, and exceeding them may incur additional fees. Buying a car does not have mileage restrictions.
Can I make modifications to a leased vehicle?
Generally, leased vehicles must be returned in their original condition, without significant alterations. When you buy a car, you have full freedom to modify it as you see fit.
What happens at the end of a lease term?
At the end of a lease, you have the option to buy the car, return it, or potentially enter into a new lease agreement.
Can I sell a leased car before the lease term ends?
Yes, you can usually sell a leased car before the lease term ends, but you'll need to pay off the remaining balance on the lease.
Do I need to maintain and service a leased car?
Yes, you are responsible for regular maintenance and servicing of a leased vehicle, just as you would be if you bought it.
Can I negotiate the purchase price of a leased vehicle?
In some cases, you may have the option to negotiate the purchase price of a leased vehicle at the end of the lease term.
What are the insurance requirements for buying vs leasing?
Both buying and leasing require insurance coverage, but the specific requirements may vary. Leasing companies often have specific insurance requirements.