At Bob Allen Chrysler Dodge Jeep RAM, our customers in Danville have found their new car or truck. Their next question is whether it is better to buy or lease. The best financing option depends upon your situation and a few factors. Typically, buying makes more sense because it is cheaper in the long run. There are other times when leasing makes the most sense. At Bob Allen Chrysler Dodge Jeep RAM, we offer you both options.
How Leasing Works
Leasing a new vehicle is an agreement to take delivery of the vehicle by making smaller payments over a typical three-year period. You don't own the car when you are leasing it. You are usually limited to about 10,000 miles of driving per year. Some leasing agreements will allow you more mileage per year with a larger monthly payment. Leasing allows you to drive a vehicle that might be beyond your monthly budget if financed as a purchase. Usually, you can initiate a lease with a smaller initial payment than a typical loan down payment.
At the end of the lease, there is a final payment to make. At that point, you can either give the car up or purchase it for an agreed-upon price. You can also lease or purchase another vehicle at that point. If you have exceeded your allotted mileage, you must pay a fee per mile for overage. Leased vehicles are typically sold as certified pre-owned after the lease period.
When Is Leasing Best
There are certain situations where it may be best to lease rather than purchase the car with a loan.
- You like a new car every few years.
- Your budget cannot accommodate purchasing your desired car.
- You will need a different type of car three years from now.
How Buying a New Vehicle with a Loan Has Changed
In the past, loan terms tended to last no more than 60 months. Since the cost of a typical new car has risen, those loan terms are frequently more like 72 to 84 months. Another big change in financing is automakers usually offer their financing on approved credit. In the past, people often secured their automobile loan at the bank or the credit union. Today, many people finance their next vehicle purchase right in the dealership. Often, at Bob Allen Chrysler Dodge Jeep RAM near Lexington, we tend to have very favorable interest rates on approved credit for the purchase of your next car or truck.
When Buying with a Loan Is Best
- You prefer to buy a vehicle and keep it for many years.
- You tend to drive over the yearly mileage allotment of a lease.
- You intend to leave the area.
- You want to modify the car.
As you can see, it is not a cut-and-dry choice when deciding between buying versus leasing a vehicle. Whether you’re in Nicholasville or Lebanon, KY, relevant factors include determining the following over the next few years:
- Your present and projected budget
- Your commuting and driving mileage around town
- Your need and desire to keep the new vehicle
- If you intend upon modifying the new vehicle
Carefully make some determinations and predictions for the next few years. Then, check here for our current loan and leasing specials.
If you are in Danville, come down to Bob Allen Chrysler Dodge Jeep RAM and test drive your new car or truck first. Then, we can set you up with your preferred type of financing on approved credit, whether buying or leasing.