Should You Lease or Buy Your Next Vehicle?

Once you've decided on your next Chrysler, Jeep, Dodge or Ram vehicle, you then need to decide whether it's to your benefit to lease or purchase it. Depending on lifestyle and preferences, there are distinct advantages and disadvantages to each. That's why the experts in our Finance Center helped us put together this handy guide to help our Vallejo-area customers decide which financing option is best.

If you regularly entertain business clients, a lease may be the right way to go since you're able to get behind the wheel of a more luxurious vehicle for less money -- and there may be tax benefits, depending on your profession. Leasing also makes a great deal of sense for our customers who prefer to drive a new vehicle every two or three years.

Benefits of Leasing a Vehicle

  • Lower down payment and lower monthly payments
  • Lower repair costs, since the factory warranty covers most repairs over the lease's terms
  • No trade-in discussions at the lease's end
  • You know what excess mileage will cost, and can choose to add extra allowable mileage by paying more up-front or through your monthly payments
  • You only pay sales tax on the portion of the car that you finance (i.e., the lease's length)
  • You get into the newest, safest vehicle every two or three years, with the lowest initial cost
  • If the vehicle ends up damaged, or with a bad CarFax® history report, you can still return it

Drawbacks to Leasing a Vehicle

  • You don't own the vehicle when the lease ends
  • Typically, you're restricted to driving between 12,000 and 15,000 miles per year, with any excess mileage fees due at the end of the lease
  • If you're not diligent about taking care of your vehicle, wear-and-tear charges may add up and be due at the end of the lease's terms
  • Over the long run, continuing to lease vehicles may cost you more money than you'd spend if you purchase vehicles and drive them beyond their loan terms

Benefits of Buying a Vehicle

  • You're free to modify and accessorize your vehicle as you wish
  • Purchasing is the more economical choice if you tend to drive your cars long after your loan is paid off
  • Greater flexibility to sell or trade-in your vehicle when you wish
  • No excess mileage penalties
  • Take advantage of the vehicle's equity when you're ready to sell it or trade it in

Drawbacks to Buying a Vehicle

  • Generally higher down-payment and monthly payments
  • You're on the hook for maintenance and repair costs when the warranty expires
  • Trade-in discussions can be a hassle, especially if your vehicle has a negative CarFax® report
  • Your available cash can be tied up in a car that's depreciating, rather than an investment that's growing

In short, leasing allows you to get behind the wheel of a vehicle for less money, since you're only financing a portion of the vehicle's cost. However, once the lease is up you'll either need to return the vehicle and lease or purchase another, or purchase the car you've been driving -- meaning yet more payments. When you purchase your car you're typically signing up for higher payments over a longer period of time, but you'll have full ownership of the vehicle when your payments end.

In the end, only you can decide which route is the best one for you to take. However, the professionals in our Finance Center are always happy to find you the loan or lease options that work best for your budget.

To learn more about any of the Chrysler, Dodge, Jeep and Ram vehicles in our comprehensive inventory, visit our showroom at 1001 Admiral Callaghan Lane in Vallejo.

Categories: Finance