Car Leasing vs. Financing: Pros & Cons
SHOULD I BUY OR LEASE A CAR?
Compare the advantages & disadvantages of leasing vs. buying
Wondering whether you should lease a new Hyundai or finance a vehicle? There are numerous benefits and disadvantages to both, each of which will depend on your personal situation, budget, and lifestyle.
Find out which option is right for you.
Find out which option is right for you.
BUY A VEHICLE
Buying provides the pride of ownership and trade-in value. You might like the idea of owning a car for many years and handing it down to your kids. In the long run, you spend less on a purchased car, especially if you take care of it so that it lasts a long time. You can buy an extended warranty if you plan to keep the car for many years. You can sell your car or trade it in at any time.
Review the pros and cons of purchasing a vehicle below:
Review the pros and cons of purchasing a vehicle below:
Advantages
- Eventually, loan payments will end
- Pride of ownership
- Can dispose or sell of at any time
- Receive residual value at trade-in (built equity)
- Can customize as you'd like
- No mileage restrictions or wear-and-tear clauses
- Can purchase new, used or certified
Disadvantages
- Higher monthly payments (short-term)
- Higher down payment
- Pay sales tax on purchase price
- Immediate depreciation
- On the hook for all service, repairs, etc. after warranty expires
- May have a higher loan interest rate or APR
- Can end up being "upside down" on a car loan if the market fluctuates dramatically
- Must deal with selling or trading the vehicle in at some point
- More difficult to get approved for financing if you have a poor credit score
LEASE A VEHICLE
Leasing requires less of an initial outlay and monthly payments are lower. Many businesses like to lease vehicles used for work so that they can deduct the payments without having to depreciate the car. If your business involves driving clients around, say for entertaining or showing real estate, you might want to lease an impressive luxury car that might otherwise require a sizeable down payment. You might just like a new car in the driveway every few years.
Review the other pros and cons of leasing a vehicle.
Review the other pros and cons of leasing a vehicle.
Advantages
- Can afford a better car or higher trim level
- Lower down payment, or none at all
- Lower monthly payments
- Pay sales tax only on financed portion
- Little maintenance needed
- Always driving a late-model vehicle with the latest safety features
- Lease may include oil changes & routine service
- You know its buyout price ahead of time
- Can easily walk away at lease-end
- Don't have to worry about selling or trading it in later
- Don't have to worry about its resale value
- Lease Loyalty programs exist to waive turn-in fees when re-leasing
- May include GAP coverage
- Can lease for 12, 24, 36 months or longer
- Businesses can lease and save money (tax deductions)
Disadvantages
- No residual value/equity
- Penalties for excess mileage (up to $0.50/mile) and early termination
- Payments go on forever if you continue leasing
- Must pay for wear and tear/damages
- Must be returned in original condition, which includes matching tires, etc.
- Pay a fee to return the vehicle (when not re-leasing)
- Cannot lease used vehicles
- Insurance premiums may be higher since you're driving late-model vehicles only
McCarthy Blue Springs Hyundai
3000 NW South Outer Road
Blue Springs
MO
64015
US
Hours Of Operation
Sales
- Monday
- Tuesday
- Wednesday
- Thursday
- Friday
- Saturday
- Sunday
- Closed
Service
- Monday
- Tuesday
- Wednesday
- Thursday
- Friday
- Saturday
- Sunday
- Closed
Parts
- Monday
- Tuesday
- Wednesday
- Thursday
- Friday
- Saturday
- Sunday
- Closed