SHOPSMART AUTOS – CUSTOMER INFORMATION – MARCH 8, 2021
Leasing vs. Buying a New Car Comparing the two major finance choices Difficult Comparison It’s difficult to make a fair head-to-head comparison between, say, a six-year loan and the standard three-year lease. At the point the lease ends, the bank borrower still has three years of payments to go, but the lessee has to look for another car—or perhaps take the lease’s buyout offer. A lease can also be subsidized, or “subvented.” The automaker either takes money off the top with an extra rebate just for lease deals, or it can raise the residual, or both. An automaker may also kick in extra rebates on a lease deal, ones not available to a loan customer. In addition, the “money factor” (interest rate) on a lease may be different from the interest rate offered on a loan, making an apples-to-apples comparison almost impossible. Generally, two three-year leases will cost thousands more compared with buying a car (with a loan or with cash) and owning it over that same six-year period. And the savings increase for car buyers if they continue to hold on to the car, say, for another three years for nine years total—even factoring expected maintenance and repairs. If a lease’s limitations put you off, consider buying a less expensive new car or a well-maintained used car, such as a certified pre-owned vehicle from a franchised dealer, or getting a longer loan term. Whether you get your new car with cash, a loan, or a lease, you can save by choosing one that holds its value well, is reliable, and gets good fuel economy. For savings upfront and over the long haul, buy used. And pay cash. Don’t Forget to Negotiate Many people assume that the monthly payment printed in a leasing ad is etched in stone. But that figure may be based on the manufacturer’s suggested retail price, which can be negotiated downward just as if you were buying the vehicle. Be aware, though, that the best lease deals are available only to those with superb credit, and that they may only be cheap because the automaker is trying to clear the decks of slow-selling cars. With the disruption to the automotive market for EV vehicles coming down the later this year by the 3rd and 4th quarters, a lease may look very attractive to many consumers. Be prepared. Make it a champion day!Tags: 2019 Subaru Forester Touring, 2020 BMW iX3, 2020 Chevrolet Suburban, 2020 dodge charger, 2020 EQC, 2020 Ford Super Duty, 2020 Honda Pilot, 2020 Kia Optima, 2020 Mercedes Benz, 2020 Nissan Versa, 2020 Subaru WRX STI, Audi SUV, BMW, Brandon K. Hardison, Chevrolet Car, Chevrolet Sonic, Dodge charger, electric vehicles, honda, Honda Pilot, Hyundai SUV, Mercedes Benz, Nissan Rogue, SUV, upcoming car, Volkswagen, Volkswagen Tiguan SEL Premium R-Line, Volvo Car
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