Leasing vs Buying
Every car buyer is faced with the choice to either lease or buy their next vehicle. As you’ll read in this quick comparison, there are plenty of benefits to leasing and to buying. However, the decision really comes down to your specific financial needs and your lifestyle.
MINI of Annapolis welcomes drivers to this leasing vs. buying write-up, where we’ll explain everything you need to know about these two financial paths. By the end of this read, we hope that drivers near Annapolis, Arnold, and Parole, MD, will be able to easily choose which method works best for them.
Keep reading below!
Leasing vs Buying: What Does It All Mean?
Let’s start off by defining what “leasing” and “buying” mean. Leasing a car essentially means you are paying for your expected usage of a car, rather than its full market value. This is calculated through its depreciation, which is the difference between your car’s original value and the value upon its return.
Much like renting a car, leasing allows drivers to use a car for a predetermined amount of time—also known as a “lease term.”
On the other hand, buying means you are paying to eventually own a car. Most commonly, drivers take out a car loan and then pay off it off through monthly installments. Once you pay off the total amount of the loan, the car is officially yours.
Leasing also involves monthly payments; however, they tend to be noticeably lower. Remember that with leasing, you’re only paying for the vehicle’s depreciation plus any monthly interest and fees.
Next, we’ll go into more detail about the different benefits leasing and buying have to offer.
The Benefits of Leasing vs Buying
With buying, the main benefits have to do with the freedoms associated with owning your own car. Having full ownership of your vehicle means you have the option to do any and all of the things you want to do to it—it’s all yours!
Want to add a cool body customization? Would you like to install an advanced audio system? How about applying bumper stickers or including interior accessories? It’s all possible when you buy your next vehicle.
Another benefit is that you won’t have to be mindful of the number of miles you’re putting on the vehicle. Since you’re paying to eventually own it, there’s no difference in putting on an extra 2,000 miles compared to the year before.
However, with leasing, you’re expected to stay within a predetermined mileage range. So, you’ll have to be more aware of the mileage you’re putting on your vehicle.
Another great benefit of buying is that you’re working towards ownership. Once your loan is paid off, there won’t be any more car payments. For example, if you agree to a 3-year loan but keep the car for ten years, you’ll enjoy seven years free from car payments.
With leasing, there are a ton of reasons drivers love to participate in a lease deal. Here are a few:
- Lower monthly payments: As we mentioned before, the monthly payment with a lease deal is usually a lot lower compared to buying.
- A new car every few years: By leasing your new vehicle, you’re able to switch out for the latest and greatest models on the market. Most lease terms last about three years, so it’s easy to change to a more current model at the end of the term. Drivers can enjoy the newest advancements in performance, safety, and technology.
- Easier maintenance: Some lease deals offer factory warranties that last about three years. That means some of your maintenance expenses could be covered during your lease period.
What Is in a Lease Agreement?
If you do decide to lease, our financial experts will draw up what is called a lease agreement. Within this agreement are the details of your lease term, along with other conditions, including:
- The length of the leasing period—the average is two to four years
- How many miles you’re able to drive per year—usually 10,000 to 15,000 miles
- The expected condition the vehicle should be in when you return it
- What is defined as normal versus excessive wear and tear
You have the final say before signing your lease agreement. We’ll do everything we can to adjust the agreement to your liking before you sign on the dotted line.
Leasing or Buying: The Choice Is Yours!
If you’re still debating whether you should lease or buy, stop by our financial center to meet with one of our MINI of Annapolis team members. We’ll be happy to assist you in making that decision.
Drivers near Annapolis, Arnold, and Parole, Maryland, should visit our showroom to get started on drawing up their personalized payment plan today!