Buying VS Leasing

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Buying

Leasing

Ownership

You own the vehicle once you make the last payment.

Ownership

You don't own the vehicle; you must return it at the end of the lease unless you choose to purchase the vehicle.

Up Front Costs

Some of the up-front costs could include the following; down payment, taxes, registration and other fees.

Up Front Costs

There may be up-front costs such as first month's payment, refundable security deposit, capitalized cost reduction, taxes, registration or other fees.

Payment

Monthly payments can be higher (or for a longer term) because you are the entire purchasing price of the vehicle.

Payment

Monthly payments can be lower (or they could be the same with a shorter term) since you pay only for the vehicle's depreciation.

Early Termination

If you end the loan early you are responsible for the loan pay-off amount.

Early Termination

If you end the lease early you are responsible for the lease pay-off, plus any early termination charges.

Returning the Vehicle

Not required, but when you want a new vehicle you may have to sell or trade the vehicle.

Returning the Vehicle

When the lease is up you return the vehicle to the lender and pay any end-of lease costs, then walk away.

Future Value

You assume all the risk of the vehicle's future market value.

Future Value

The future value of the vehicle is predetermined by the lesser and the leasing organization assumes all the risk for the vehicle value, not you.

Mileage

There are never limits to the miles driven on the vehicle, but the more miles you drive the lower the vehicle's trade-in or resale value will be.

Mileage

All leases have mileage limitations that you negotiate up front. If you exceed these limitations you will be assessed a mileage penalty at the termination of the lease.

End Of Term

You made your last payment and you now own your vehicle.

End of Term

The current lease had ended and you must decide to purchase the leased vehicle outright or lease another vehicle.

Additional Information

Although it may require higher monthly payments or longer financing terms, there are no restrictions for mileage, how or where you can use the vehicle and the money is going towards something you will eventually own.

Additional Information

There can be a few more advantages leasing; leasing is beneficial for people who want new vehicles every 2 or 3 years and the protection of having a vehicle under full factory warranty. This may be a better choice if the vehicle is being used for business, you can usually deduct the lease payments as an expense rather then deducting the depreciation with can be less.

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