If your ready to upgrade your vehicle and have absolutely decided that a new car is the way to go, then you generally have two options. Leasing can offer customers the ability to get into a new car, or a lower payment per month compared to buying, and makes it easier to upgrade cars more often.
What’s the Difference?
Leasing works a bit differently than buying. Rather than getting a loan for the entire price of the vehicle, the dealer negotiates a price for the total value of the car. The lease customer pays the difference of what the car price is, and the expected value of the vehicle at the end of the lease term (residual value). So for example if the car is worth $20,000 and at the end of the term it will be worth $15,000, then the lease cost is $5,000.
Benefits of Leasing
Unless you have a significant trade in and down payment, leasing will almost always get you a lower monthly payment than financing because all you’re paying for is depreciation.
Most leases are for a term of three years which happens to be the length of the average manufacturers warranty. This means that your car is covered under warranty the entire time you have it.
Lease Terms are usually about three years. At the end, you can either buy or lease a new vehicle. Because of the lower monthly payments most customers can afford to get more options and upgrades while still staying in their budget.
Drawbacks of Leasing
Because you are negotiating a payment based on the depreciated value of the car at the end of term, leases have things like mileage limits. Excess charges can be steep so make sure you have an accurate estimate of how much you drive. Leases can also come with excess wear and tear fees if the car is not returned in as close to original condition as possible.
When the time comes to upgrade your car, you may want to consider leasing a new vehicle. Leasing at Dulles Motorcars can get you a lower payment, and lets you upgrade your vehicle more often than buying.