Dealer Specials

Leasing vs. Buying

It’s one of the biggest questions out there – should you buy the car, or lease it?

Purchasing a car is a big deal and a big commitment. There are always so many questions and so many forks in the road. Hopefully by giving you a comparison of buying versus leasing, we can help you figure out just which direction to choose.

Facts About Leasing

Although approximately 80% of auto consumers either pay cash or finance their purchase with a loan, leasing numbers are on the rise again due to factors such as increasing interest rates. In addition to the lower payments and higher interest rates, the benefits of leasing are many. They include:

Purchasing flexibility - Leasing allows the buyer to always have a new or late-model car parked in their driveway.

Lessees only pay for the depreciation on the car, not the entire vehicle.

Leasing payments can be written off as a business expense on your tax returns if the car is used for your job.

Lease obligations don’t show up on credit reports.

A variety of options are available to you at lease end.

Here are some more tips: pay attention to the costs involved to ensure it’s a good value, shop around and negotiate not only the monthly payments, but the purchase price as well, lease for the shortest term you can afford and don’t keep the lease for longer than the car’s original bumper-to-bumper warranty.

Facts About Buying

Buying a car also puts up a good argument. When compared with leasing:

Financing a car is much simpler.

Over time, leasing a series of new cars can be more expensive because you don’t own a used car at the end of the agreement.

Leasing has many fees that buying does not, for instance acquisition and disposition fees, dealer preparation, and default charges on late monthly payments.

As with leasing, you need to be a smart shopper. Make sure that you have set up a competitive bidding environment - competition among dealers is your most effective leverage, and get online price quotes.

These are just a few tips and a few comparisons to get you started. It’s a big decision, so make sure you give it some good thought and always weigh your options with research and strong consideration.

CU Direct Connect provides credit union leases in partnership with Credit Union Leasing of America. For more information visit www.cula.com.