Car Leasing vs. Buying | Clawson Honda in Fresno, CA

Car Leasing

Leasing accounts for nearly one-third of vehicle sales, as many buyers use it to acquire a more expensive vehicle than they could afford with a loan. However, leasing isn't without its drawbacks, and buying could be the better choice depending on one's financial situation and car usage. Leasing is similar to financing, but the loan value is based on the depreciation of the car during the lease term, plus fees, rather than the entire cost of the vehicle.

While a leased vehicle must be returned in its original condition with less normal wear and tear, leasing conveniently makes it easier to get behind the wheel of a newer vehicle with the latest technology and safety features, and lessees don't have to worry about selling or trading in the car. The monthly payment on a lease is also usually lower than a loan payment, and the lessee only pays for the difference between the car's price and what it's expected to be worth at the end of the lease, known as the residual value. Leasing may be a great choice for drivers who only want to make a small down payment or prefer a more predictable total cost of ownership.

Car Buying

Owning a car can be a long-term investment, and if you plan to keep your vehicle for a while, buying may be a better option instead of leasing. When buying a car, you become the outright owner once you pay off the loan, and as long as your payments exceed the vehicle's depreciation, you also gain equity in the car over the loan period. At the end of the loan, the car belongs to you, and you don't have to worry about budgeting for car payments, aside from the basic costs of ownership like gas, insurance, and repairs.

Purchasing a car provides you with the freedom to drive without the worry of a mileage restriction, which is especially advantageous for individuals residing in rural areas or those with long commutes. However, when it comes to selling or trading in the car later on, its market value can be more unpredictable. Additionally, one potential pitfall of buying is that, in an effort to adjust monthly payments to fit your budget, you may be tempted to extend your loan’s term. Loan lengths have been increasing, with newer loan options allowing for payment schedules that can last for almost a decade, which may be longer than you prefer to deal with.

Congratulations on taking the first step towards securing your dream car! At the end of the day, the decision to buy or lease depends on your unique situation, budget, and driving needs. At Clawson in Fresno, our team is dedicated to helping you make an informed decision toward discovering the perfect vehicle and payment plan for you. Whether you choose to lease or buy, we offer a wide range of vehicles to choose from, as well as financing options to fit your budget. Feel free to contact us today with any questions about figuring out whether buying or leasing is best for you!