Choosing a new car is a big decision. There are lots of things to consider, such as make, model, color, and features. Not only do you want your new car to fit your lifestyle, but you also need it to fit your budget. It’s not unusual for many people to be a bit intimidated by all the financing options that are available today.
Your South Florida Honda Dealers understand that navigating these sometimes complicated auto finance waters can be stressful. When you visit one of our many outstanding Honda dealerships in South Florida, we want to make sure that you understand your financing options so you can make an informed decision and feel comfortable about the entire financing process.
We believe that “knowledge is power,” so we’ve put together this informative guide to deciding whether to lease or buy your new Honda in South Florida. We’ll spell out the benefits and drawbacks of purchasing and leasing, so you can choose the right auto finance option for your needs. Regardless of whether you choose to buy or lease a new Honda from one of our dealerships, you’re sure to find that it will be a great experience.
Benefits of Leasing
You’ve seen the ads on TV and probably wondered if leasing a new car is right for you. With attractive offers such as zero money down and zero due at signing, leasing a new car could be a good bet. But before you choose to lease your next vehicle, here are a few things you should know.
First of all, when you lease a new Honda from one of our South Florida Honda dealerships, you are essentially “renting” the car for a specific period. The leasing agency or dealership retains ownership of the vehicle throughout the term of the lease. What’s good about this is that you don’t have to worry about trade-in value when it comes time to return the car when the lease is up. Another benefit of leasing is that you may be able to afford more car for your money. Why? When you lease a car, you aren’t financing the entire purchase price. Instead, you are financing a percentage of the car’s price, or the residual value, that is an estimate of what the car will be worth at the end of the lease.
While you may want to take advantage of Honda special offers, you should be aware that leases often require a higher credit score than purchases. You may also want to put some money down to help reduce your lease payments.
Another nice thing about leasing a new Honda is that you have several choices when the lease is up. You can return the car and walk away from it and buy or lease a completely different car, or you can pay off or refinance the balance of the lease and keep the vehicle.
There are a few downsides of leasing, however. First of all, there are limits to the number of miles you may drive the car in a year, usually ranging from 9,000 to 15,000 miles. If you go over these “mileage caps,” then you will be assessed a penalty for every mile driven over the limit. If you don’t drive your car very much, this may preferable. Another thing to consider is that you must return your leased vehicle in as good as condition as possible, accounting for normal wear and tear. You will be charged reconditioning fees if your car does not meet the dealership’s or the lending institution’s standards.
You also cannot modify or alter your vehicle with any aftermarket items. That means no racing stripes, spoilers, suspension kits, or anything else that isn’t “stock.”
Pros of Purchasing
Most people are more familiar with the straightforward car purchase. You walk into one of our South Florida Honda dealerships, pick out the Honda of your dreams, sign some papers and off you go. Well, it’s a little bit more complicated than that. Let’s review the basics. When you buy a car, you are financing it from a bank or lending institution. The amount you pay for the car includes such things as sales tax and the annual percentage rate (APR). You continue to make payments and do not legally own the vehicle until the entire loan is paid off in full.
The benefit to purchasing is that, once it’s paid off, you own the car free and clear. If your car is in good condition and worth keeping, you’ll save the cost of making additional payments by hanging on to it. Another benefit of purchasing is that there are no mileage caps to worry about. So if you do a lot of driving and really rack up the miles, a purchase may make more sense. You can also customize your car to your heart’s content. So go ahead and buy those racing stripes, spoiler, and lift kit.
Drawbacks of Puchasing
That’s the upside of purchasing a car. So what’s the downside? Depreciation is one thing you’ll encounter the moment you drive your new car off the lot. Luckily, when you buy a new 2016 Honda from one of our South Florida Honda dealers, you’re getting a vehicle that holds its value better than most brands. That’s not surprising because Hondas are some of the most reliable vehicles you can buy. In fact, more than 75% of all Hondas built in the last 25 years are still on the road today.
Another thing you must consider when buying a car is the down payment. Unlike some leases, most lenders require a certain percentage of the car’s price as a down payment. For instance, if you buy a car that’s worth $25,000, and the lender wants a 10% down payment, you’ll need to come up with $2,500. Of course, if you have a trade-in you may be able to offset this cost depending on your specific finance agreement and the value placed on the car you trade in.
Additionally, you can lower your monthly payment by extending the term of the loan. Many loans written today are for up to 7 years. However, be aware that you’ll be paying more interest in the long run.
We hope that you found this guide to deciding whether to lease or buy a new car useful. All of us at your local Honda dealerships in Miami, Ft. Lauderdale, and the South Florida coast share a commitment to making the lease or purchase of your new Honda as easy and hassle-free as possible. We invite you to visit one of our conveniently located South Florida Honda Dealers today, and let us show you just how easy it is to drive off in the Honda of your dreams.