Leasing vs buying a car is a question on every new car buyers mind. Leasing provides a variety of benefits to individuals and businesses who are looking for something replaceable, and upgraded to keep up with tech and safety trends. Other benefits include lower down payments, low monthly payments, and a guaranteed future value.
Pros and Cons of Leasing a Car
Lower Down Payments: Leasing requires a smaller down payment than a retail purchase does. Leases also offer manufacturer rebates.
Low Monthly Payments: A lease payment is traditionally lower than retail payments because the total value of a vehicle is not financed. On a standard 36 month lease, a $1000 down payment can lower a monthly payment by almost $30 per month. On a retail contract, $1000 down would lower a monthly payment approximately $18 a month, depending on term and interest rates. Lower monthly payments also afford the option for certain model upgrades. If an individual's budget is $350 per month and a basic vehicle can be retailed with this payment, perhaps this person can get a higher-end model with leather, moon roof, etc. for the same payment on a lease.
Guaranteed Future Value: Toyota will guarantee the future value of a vehicle, assuming the vehicle is returned in good condition at the end of the lease term. The economy, fuel costs, negative equity, market conditions, and new technologies will affect a retail purchase but will not make an impact on the guaranteed value of a lease. As long as a leased vehicle is kept in reasonable condition and fulfills the terms of a lease, the value is GUARANTEED! In fact, if the market value of the vehicle is higher than the original residual provided at the beginning of the lease, customers can take advantage of positive equity on a trade! At the end of a lease term, returning the vehicle to a dealer is simple! A guaranteed future value removes all unknowns of leasing and makes the process transparent for our customers.
The Cons? - Well, you'll have to return it eventually.
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Pros to Retail Purchasing:
Buying and owning a car or truck has its perks too. If you plan on keeping your car for 7 years or longer, buying your vehicle may be a better bet. Toyota's reputation on quality makes a long-term vehicle purchase a great investment.
Some people are just more comfortable with a traditional purchase. The idea of leasing is not for everyone, but at Kendall, we want to offer options to our customers so that they are offered the best deal and are happy with their vehicle purchase!