One of the first decisions you need to make when getting a new car is whether you want to buy it by taking out a loan or take him home after signing a lease contract. Here are some of the pros and cons of each choice.
Most car shoppers opt to buy their new cars with a loan. When you do this, the bank actually owns the car until you pay it off. Once that happens, the car belongs completely to you and you can do whatever you want with it. Even before you pay off your loan, you can drive your car as much as you want and make any modifications you want.
There are some drawbacks to buying, however. In the short term, it will cost you more because the monthly payments are higher than they would be with a lease and you usually need a larger down payment (typically around 20% of the purchase price). You also have no control over the depreciation and future value of your car.
With a lease, you will sign a contract that lets you keep the car for a certain amount of time (36 months is common). During that time, you will still make monthly payments; however, since they are only based on a portion of the car’s value, they will be lower than a loan payment would be. This means, you could potentially afford a nicer car and get more features than you could if you took out a loan. When your lease expires, you simply have to return the car to the dealership.
One of the biggest drawbacks to leasing is the mileage restrictions. If you exceed that mileage during your lease, you will have to pay for the overage and any excessive wear and tear. You also don’t build any equity in the vehicle.
Contact us at Quebedeaux Mitsubishi if you have any questions about buying or leasing one of our new vehicles.