The decision of whether to lease or purchase your new vehicle is one of the most important choices for car-shoppers to make. There are many important differences between the two which can help you make your choice. This guide from DCH Montclair Acura highlights some of the most notable aspects.
Monthly Payments: Monthly lease payments are always lower than they would be if you purchased the vehicle. That’s because you only have to pay for the vehicle’s depreciation and additional rent charges. The depreciation estimate is based on the assumption of a certain amount of miles per year and proper maintenance of the vehicle itself.
Sales Tax: Typically, drivers who lease a vehicle will only pay sales or use tax on their monthly payments and any capitalized cost reduction. This mean less sales tax paid over a longer period. When purchasing a vehicle, sales tax is paid on the full purchase price (although the value of your trade-in is often excluded from this amount).
Who Owns the Vehicle: During a lease, the dealership maintains ownership of the vehicle. At the end of a lease, you can choose to renew your lease, purchase the vehicle, or return it to the dealership and pay any associated costs. Purchasing a vehicle means that you are the owner whenever you make your final payment.
Warranty Coverage: All vehicle warranties cover terms of 36 months or less, which means it’s likely that your full lease term will be covered. This helps ensure fixed costs of driving over that period. If you finance a vehicle, your warranty will expire after a certain period and your costs of driving will be variable.
Trading Vehicles: Drivers who lease have the option to change cars whenever their lease term is up by simply entering into a new lease. Purchasing a vehicle makes it more difficult to change vehicles frequently, since you will be paying for the full cost of the vehicle and the depreciation, including any unexpected depreciation (in a lease, the risk of unexpected depreciation is carried by the lessor).
At DCH Montclair Acura, we are proud to offer affordable lease options on almost every new model. Contact us or visit our dealership today for more information on leasing and purchasing.
