Many Americans see leasing as something that only incredibly well-off people do, but that couldn’t be further from the truth. Leasing a Volkswagen near Arlington, TX can have a surprising number of benefits for a wide range of people.
On the other hand, sometimes it just makes more sense to buy a car instead. If you’re on the fence and trying to decide which is best for your situation, keep reading to check out our quick list of pros and cons of leasing vs. buying.
Pros and Cons of Leasing a Car
Leasing a car sort of works the same as leasing an apartment. Basically, you agree to pay a certain amount over a certain course of time, and that amount is broken into monthly payments. After the lease term is over, you simply return the vehicle to the dealership and go on your merry way.
Lease terms typically last 2 to 3 years. Because you don’t technically own the car, you’ll be expected to keep it in reasonably decent shape, and nearly all lease agreements put limits on how many miles you can drive in a year.
Benefits of Leasing a Car
- Pay less per month: When you lease, the payments are calculated based on the expected depreciation over the course of the lease—basically, you’re paying the difference between what the car is worth now, and what the car is projected to be worth at the end of the term. The upshot is, since you’re not financing the entire value of the car, monthly lease payments tend to be significantly lower than loan payments for the same vehicle.
- Low risk of car troubles: The majority of leased vehicles are brand-new, which means that you’ll be driving it during its most problem-free years. It’s highly unlikely that you’ll run into major repairs.
- Warranty coverage: Even if you do have to make a major repair, since the car is usually new, it’ll be covered under the manufacturer’s warranty.
- Drive a new car with the latest features: Because leasing lets you drive a newer car for less money per month, you can enjoy all the latest safety, tech, and comfort amenities, which may not fit into your budget if you financed the car instead.
- Easy end-of-lease process: When the lease is done, all you have to do is return the car to the dealership and hand over the keys. There may be some small lease-end fees involved, but you won’t have to worry about selling the car yourself.
- Potential lease deals: Many dealerships—including our VW dealership near Fort Worth—sometimes offer low interest lease specials, which can lower your monthly spending even further. Some shoppers may even qualify for 0% APR.
Downsides of Leasing a Car
- No ownership: Some folks choose to do a lease-end buyout, which means they finance the car after the lease is over. But, the majority of lessees don’t choose this option, so they never actually own the car they’ve been driving for years.
- Condition and mileage restrictions: When you lease, you’ll be expected to keep the car in very good condition. You’ll also only be able to drive a certain number of miles per year, typically around 12,000 to 15,000 miles. This can pose a bit of a challenge to certain people who travel a lot, or drivers who tend to keep a messy car.
- Limited pre-owned options: It’s a common misconception that you can only lease new vehicles. Everyone, say it with us—yes, you can lease a used car. However, these cars are in high demand, so options may be very limited.
Pros and Cons of Buying a Car
When you buy a car, you usually take out a loan through the dealership or another financial institution to finance it. You then make payments on the loan amount and the interest until the balance is fully paid off. After the loan is done, you own the car free and clear.
Most auto loans fall between a 4-to-7-year term. If you fall too far behind on your loan payments, the dealership or bank may be forced to repossess the vehicle.
Benefits of Buying a Car
- Ownership: Even before your auto loan is over, the car is still yours, as long as you keep making those monthly payments. This means that you can drive it as much as you want, modify it with aftermarket parts, and eat as much fast food in it as your heart desires. And, once you pay it off, you have a valuable asset that can last you years and years.
- Can be a better long-term investment: New vehicles tend to lose most of their value within the first year or two. After that, the rate of depreciation levels off. So, as long as you take care of the car, you may be able to sell it or trade it in for a profit in the future.
- Greater selection of pre-owned models: Just about any used car can be financed, which opens up a much greater selection. Buying a pre-owned model can also offset the higher monthly cost of financing vs. leasing.
- Less expensive in the long run: While it may be more expensive in the beginning, buying a car can pay dividends down the road because once the loan is paid off, you only have to worry about maintaining the car.
- More control over finances: Lease agreements tend to be pretty ironclad. On the other hand, when you finance a car, you can still sell or trade the vehicle, even before the loan is finished. You may also have the option to refinance your vehicle, which can save you truckloads of money if interest rates drop or your credit improves.
- Attractive finance specials: Dealerships regularly run special offers, which can grant qualifying customers a more favorable rate or monthly payment. These offers often pop up at certain times of the year, like around the holidays.
Downsides of Buying a Car
- More money up front: Buying a car usually requires you to come up with a down payment. It’s recommended to put at least 20% of the total value down, because this will prevent you from ending up upside down on your loan. Because of this, financing a car can be significantly more expensive at the start.
- Higher monthly payments: Because you’re borrowing a loan equivalent to the entire value of the car (minus whatever down payment you made), monthly payments on an auto loan are generally higher than a lease.
- Repair costs: After the warranty period ends, you’ll be on the hook for all repairs. This can be a bit of a gamble if you’re buying a used car with high mileage. Of course, you can always offset this risk by considering a certified pre-owned model.
Lease a Volkswagen Tiguan Near Mansfield, TX
Whether you decide to lease or buy, Family Volkswagen of Burleson is here to guide you through the process with expert knowledge and top-tier customer service. If you still have any questions about the leasing process, feel free to reach out to our team by contacting us online or giving us a call at (682) 349-1946.
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