Should You Buy or Lease Your Next Vehicle?

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This is the time of year when auto dealers really step up their sales efforts. With the colder weather, people don’t get out as much, so they’re not visiting dealer lots and showrooms. The dealers want to start the year with strong sales, so you’ve probably been seeing a lot of TV commercials and other advertising, all promising the best deals if you buy now.

If you’re in the market for a new car or truck, your first decision will probably be which model to get. The next big question is how you’ll pay for it. Assuming you don’t plan to pay the full price in cash, one approach is to make a down payment and finance the rest of the price with a car loan. Your other option is to lease the vehicle. So which is the right approach for you?

When you buy a vehicle, you own it until you’re ready to sell it or trade it in on a newer vehicle. When you lease, the vehicle belongs to the leasing company and you have the right to use the vehicle for the length of the lease (usually two or three years). When the lease ends, you don’t owe anything.

Some choose leasing because the monthly lease payments are typically lower than what you’ll pay with a car loan. Be sure to review the mileage limits and evaluate if it fits within your driving habits. If you plan to have your vehicle longer, you may choose to purchase. Just a reminder, the value of a brand new vehicle drops immediately after the purchase.

Whether you’re planning to lease or purchase, IMCU can help. If you need some guidance, contact our Auto Advisor, Brent Wolfcale at 317.814.2409.

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