How to Decide If Leasing Your Next Vehicle is the Best Next Step

Are you thinking about investing in a new Ford vehicle? There are two different options when deciding to drive a new car: buying and leasing.  Purchasing a car typically requires borrowing money and paying monthly payments made up of principal and interest.  Leasing also requires monthly payments, though they are usually lower than loan payments. That said, when you lease, you have to keep the car in tip-top shape, paying for service as needed. Continue reading to get the full list of pros and cons to leasing a new vehicle.

Pros to Leasing

The first benefit to leasing is the amount paid per month. The expenses paid on a month-to-month basis are lower when you lease, thus making this option appear more attractive financially. Said monthly payments are normally lower due to not paying towards a principal and interest, as you would do when purchasing a vehicle. What this means is that by leasing a vehicle, you may be able to drive a higher-priced vehicle than what you would by purchasing or you can simply save money.

From a maintenance standpoint, the vehicle will be under a factory warranty for the whole lease, thus making mechanical issues a non-concern. And at the end of your lease, you can drop off the vehicle at the dealership instead of going through the hassle of trading it in or selling it. Overall, there are tons of advantages to leasing a vehicle, but that’s not to say it is necessarily for everyone.

Cons to Leasing

In the long term, purchasing a vehicle is less expensive. This is because you no long have monthly payments after paying off the loan. On the contrary, monthly payments are required during the entire leasing periods. There are also costs for the wear-and-tear on the car.  Lease contracts come with a limited number of miles and if you go over that limit, you will have to pay an excess mileage penalty. The vehicle is also expected to come back in “showroom condition.” It needs to be returned looking the same as when you first leased it. So leasing is probably not a great option for a new driver.

Is Leasing Best for You?

Financially, choosing between a loan and a lease depends on how long you would like to lease or own a car. The terms and conditions for the respectable contracts may vary, so it is important to get all of the information before you decide to lease or purchase a vehicle.  Longer loans are less valuable because, when considering the interest paid, you are essentially spending more than the car is worth. If you would like to have both low monthly payments and drive a new vehicle every few years with little hassle, then leasing is probably worth the additional cost.

Have more questions or need help deciding which option is best for you? Contact us at Pearson Ford to choose the best option for you and your family today.