Your choice to purchase or lease a vehicle is one of the most serious, costliest decisions you’ll ever make. Tens of thousands of dollars are at stake, and should you choose unwisely, you may be left with tens of thousands of regrets.
Whether you’re straight out of college or moving on to your 12th vehicle, it’s important to understand the advantages and disadvantages of leasing and buying. Weigh the pros and cons of car loans and car leases below to see which option is right for your future.
Car Buying vs. Leasing: Pros & Cons
|Lower monthly payments||Build equity|
|Potentially no (or low) down payment||Lower long-term insurance costs|
|Upgrade every few years||Lower long-term registration fees|
|Automatic GAP coverage with Honda leases||No monthly payments after loan is paid off|
|Always under warranty||No mileage restrictions or wear and tear fees|
|Newest technology||Can customize the vehicle|
|Low maintenance and repair costs||Can sell or trade in at any time|
|Tax advantages for businesses||The best value if you’re a good car owner|
|Never “upside down” on a loan||Ownership|
|Virtually worry-free ownership|
|Flexible lease terms|
|No or less sales tax paid|
|Fee waivers for loyal Honda lessees|
|Better fuel economy with newer models|
|Higher insurance and registration costs||Higher monthly payments until loan is paid|
|Mileage restrictions||Higher down payment|
|Wear and tear charges||Warranty will expire|
|No equity unless you buy at lease-end||Higher long-term maintenance costs|
|Must get a new car at lease-end||Repairs must be paid for out of pocket|
|Cannot customize the vehicle||Depreciation anxiety|
|Early lease termination fees||Can become “upside down” on a loan|
|Turn-in fees when returning the lease||May have a high-APR loan with bad credit|
|Stable income is strongly recommended||Extra hassles to sell or trade in later|
|GAP coverage is extra|
|Vehicle will eventually be outdated or die|
Who Should Lease a Car
What leasing comes down to most is the convenience factor.
Newer cars rarely have any issues within the first few years, and if one does, there’s a fair chance that the issue is covered by its new-vehicle warranty. With the exception of oil changes and routine maintenance, a car lease is as worry-free as it gets.
When you lease a car, you also pay less each month than if you’d financed the same model. This makes car leasing more advantageous to people who can’t afford to pay a large monthly car loan charge.
Leasing a vehicle may make the most sense if you:
- Are too busy to deal with the hassles of owning an unreliable vehicle
- Don’t trust mechanics
- Don’t care about building equity or selling later
- Can’t spend too much on a vehicle
- Don’t drive more than 12,000 miles a year, on average
- Take good care of your vehicles
- Don’t smoke in your vehicles
- Don’t plan on voiding its warranty
- Want a new vehicle every 3 years
- Will use the vehicle for business
- Have predictable, stable income
Who Should Buy or Finance a Car
While purchasing a car isn’t as convenient as leasing, it does make the most sense for those
who value a wise investment over dependability. That’s because every payment made on a car loan puts you one step closer to ownership, which means the opportunity to sell and make some of those payments back. Owning a vehicle can be more work, but it can pay dividends after 5-10 years.
Buying a vehicle may be worth considering if you:
- Drive more than 12,000 miles a year
- Want to customize your vehicle
- Can afford higher monthly loan payments for several years
- Are able to put down a substantial down payment
- Want to sell down the road
- Are a smoker
- Know a dependable mechanic
- Don’t mind being out of warranty
- Can drive the same car for a long time
- Don’t need the newest technology
- Can have more of your cash tied to your vehicle
Of course, no two situations are the same, which can make it difficult to utilize articles like these in your decision-making process. However, if you’re still unsure about whether to buy a vehicle or lease a Honda, you have access to plenty of helpful experts at a car dealer near you. Simply ask for assistance in determining which option is right for you and your family.
About South Florida Honda Dealers
With several Honda dealerships located throughout the state, your South Florida Honda Dealers offer a great selection of new and used vehicles for sale, as well as Honda lease deals and finance specials. Call or visit your nearest Honda dealer in South Florida to get a price quote, schedule a test drive, or learn more about the benefits of leasing and financing.