Utah Buick dealers are able to help you choose wisely between your buying and leasing options, not an easy task. One aspect of your choosing will relate to your personal values, feelings, priorities, and preferences. How crucial is it to you to drive a new vehicle every two or three years? How important is it to keep your repair risks minimal? How important is having a low monthly payment? How much do you desire a payment-free vehicle as soon as possible? Making decisions on these types of personal priorities helps you sort through the non-financial issues, but it’s also important to understand financial differences between the leasing and buying processes.
Through a six-year comparison of the three-year consecutive leases of two new $20,000 vehicles, with the purchase of a new $20,000 vehicle, there appears to be lots of difference in the amounts spent on down payments, insurance, monthly payments, taxes, maintenance, and DMV costs. The purchased vehicle (bought on a five-year loan) totaled $34,228 in costs over the six years and retained maybe a few thousand dollars of value at the end. The leased auto totaled $38,176 in the six years of costs and had no retained equity. That is a $4948 bigger cost for the leased cars, without adjusting for the purchased car’s retained value. The purchased vehicle did have one payment-free year out of the six. So, buying provides a vehicle with partial equity and higher monthly payments, for a lower overall cost. And leasing provides an auto for lower payments, no equity, and higher overall costs.
So, in the six-year comparison, the cheapest route is to purchase a car, but this has larger monthly payments that could extend over the full six years. A purchaser would keep the same vehicle for six years instead of re-leasing a new one every three, but would maintain the option to keep the old vehicle as long as desired, potentially for many more years. Conversely, the leased car goes back to the dealer as soon as the lease is over, making the driver vehicle-less.
Leasing offers the advantage of low or nonexistent down payments and lower sales taxes amounts, but it generally has higher insurance costs than purchasing does. Leased autos, however, usually have built-in gap coverage, while purchased autos almost never do. This means that when a financed vehicle is stolen or totaled, the debtor could end up paying off the bank balance (even for thousands of dollars) after the insurance company has settled.
Leasing a car is somewhat more complicated than buying one is, and it gives more opportunities to misinterpret and misunderstand the process and make mistakes. So, it’s prudent to be as informed and careful as possible when new to leasing. One thing to be aware of with leasing is that when it’s over and you turn in your vehicle, if you’ve exceeded your allowed miles, you will pay a penalty. To get more leasing and buying information, visit your GMC, Buick, or Pontiac dealers in Utah.
Want to find out more about GMC dealers in Utah. Stop in at Gregory Motor’s website to get more information about GMC dealers in Utah and help with deciding between leasing and buying.
Tags: Autos, GMC dealers in Utah, Greogory Motors Utah, Pontiac dealers in Utah