Leasing vs. Financing

Leasing vs. Financing a New Ford at Griffith Ford Seguin

Leasing is an alternative to purchasing a vehicle that has become quite popular in recent years. Griffith Ford Seguin offers both options for drivers in and around Seguin, San Marcos, and New Braunfels. You may be wondering if one way of getting a vehicle is better than the other. To help you decide, let’s go over the benefits and disadvantages of leasing and financing.

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Buying a New Vehicle

When you buy a vehicle, you get a conventional car loan from a bank, credit union, or some other lending institution, and you set up your loan to make payments for a specific number of years. At the end of the loan period, the vehicle is yours. You can keep it, trade it in for a newer vehicle, or sell it for some extra money.  

Leasing a New Vehicle

When leasing a vehicle, the customer pays for the value of the vehicle while they are driving it, usually for three years. Their payments are lower in many cases, and they only pay for the part of the depreciation that happens during that lease period. When the lease is up, they can either buy the vehicle, return it for a new lease, or just return it with no new vehicle.

Making Your Decision

So how do you know which option for getting a new car is right for you? Here are some leasing pros and cons to consider.

Leasing Pros

• You’re always driving a newer vehicle that is still under manufacturer warranty.
• You are driving the vehicle when the least amount of trouble exists in the vehicle.
• You’re driving a better-equipped, higher-priced vehicle that you would likely not be able to afford with a purchase.
• Your lease may include free scheduled maintenance such as oil changes.
• No need to worry about changes in trade-in value or the hassles of trading in or selling the vehicle when you want another vehicle.
• Advanced Safety Features are part of your vehicle’s lease payment.
• Business owners may get tax breaks.
• When your term is done, you drop off the vehicle.

Leasing Cons

• At the end of the leasing term, you may end up paying more than a purchase due to the rapid depreciation of value.
• Leasing multiple vehicles, one after another, means never-ending payments.
• Leases limit driving mileage, exceeding that means paying excessive mileage penalties.
• If the vehicle is not well-maintained, you pay excess wear and tear charges.
• If you don’t like the vehicle and you want to return it, you may end up paying early termination fees.
• You must pay for new tires and other expendable items.
• You must bring the vehicle back in the condition you leased it.
• There may be a fee at the end of your leasing period.

Loan Considerations

When you buy, your benefits include owning the vehicle at the end of the loan and being able to customize it with the accessories you want. You’re not limited by mileage restrictions, so you can drive it as much as you want.
Trading in early leaves you with more in finance charges if you like driving a newer model most of the time. You will likely be paying on the old and the new vehicle in your new loan.
There are pros and cons to both leasing and buying a new car, so weigh your options carefully. If you have questions, contact the finance department at Griffith Ford Seguin, and let us help you make an informed decision.