Automobile Lease vs Finance?

Expert opinion on whether to lease or finance your new car by Barry at Barry’s Auto Body of Staten Island NY 10312.

Automobile lease pros

  1. Your monthly payment will most likely be lower.
  2. The money you put down for the car can be almost nothing. (Recommended)
  3. You get to trade it in every 2 or 3 years for a new one and get all the newest technology available.
  5. Leases tend to have more monthly specials.
  6. You do not have to worry about trading in or selling the vehicle at the end, which can be extremely difficult.
  7. Your car will always have warranty coverage. (As long as lease term is less time than the warranty. It almost always is.)
  8. You can rock a more expensive car with out having to pay for it all.
  9. As your I phone or Android phone changes or updates. So will your car.
  10. Most times the yearly maintenance is included in lease price. (This doesn’t cover car accidents.)
  11. You save money on sales tax because you are only leasing car for a few years. So you only pay those taxes associated.
  12. If the car is used for business you may be able to write the entire amount off on your taxes. Ask your accountant.

Automobile finance pros

  1. You own the vehicle and its yours.
  2. You do not have to repair the car if it is involved in an accident if you do not want to.
  3. If you plan on having the car or truck for more than 5 years this is the option for you. (Under 5 years finance normally doesn’t make sense.)
  4. Drive car anywhere you want. Leases may not let you take your car to Mexico or Canada. Depending on terms.
  5. Your are able to completely customize the car or truck.
  6. Put as much mileage as you want on the car.
  7. After loan is paid off you have no more payments. You can even pay it early if you want.
  8. Your credit score will not need to be as high.

Automobile lease cons

  1. If you damage the automobile you may have to repair it. Car manufacturers will sometimes give you an allowance for a small amount of damage.
  2. You can not put more mileage than the 10 or 12,000 miles per year you chose when you signed the lease.
  3. You don’t own the vehicle.
  4. You always have a car payment.
  5. You can not customize it as much.
  6. There might be a few restrictions on how vehicle can be used. (check with dealer)
  7. May be harder to lease with bad credit than finance.
  8. May be more complicated terms than just buying vehicle outright.
  9. The lease contract is set. Dealer may not let you turn it in early.
  10. If you go over the 10 or 12,000 set mileage you may have to pay extra for extra mileage.

Automobile finance cons

  1. You have to keep the car for at least 5 years for this option to be worth the money. Otherwise its cheaper to lease because the first two years are always the worst years for the car or truck losing value.
  2. You are responsible for the entire sales tax of the vehicle instead of just the three year lease term.
  3. If used for business your accountant may say that you can not write of the entire finance purchase like you would be able to with a lease.
  4. You have to worry about car fax if you have an accident. Where as a lease its not your problem.

A few recommendations

  1. We recommend ALWAYS without exception putting absolutely no money down on a lease vehicle. If you have a car accident, which is our business, you will most likely lose any money you put down on the vehicle. The insurance company will usually not give that money back to you.
  2. Honda/Acura or Toyota/Lexus usually are the best at excusing minor damage on your car. They sometimes give an allowance of a certain dollar amount your are allowed to have without penalty.
  3. From our experience Nissan is usually the toughest when it comes to charging you for damage put on the vehicle through lease term.
  4. Cars or trucks that hold their value through the years will normally have much better lease prices. So before you go looking. Look up which cars retain their value the best.
  5. Never make a major decision like this the same day. Always take at least 24 hours to think about it. To make sure emotions are not driving your decision. Don’t let a dealer pressure you.
  6. Take gap insurance on any lease or finance in case your regular insurance does cover something.
  7. If the dealer offers a tire and wheel protection package. Take it as long as its not too expensive.
  8. In case you want to clean up your leased or financed vehicle check out out auto detailing series on here.  How to clean, polish and wax your car or How To Super Clean Your Windshield.

Thank you very much.