BUYING VS. LEASING A VEHICLE: WHAT’S THE DIFFERENCE?

Buying versus leasing a new vehicle are similar but very different approaches to vehicle ownership. While buying a vehicle gives you complete control, leasing can be a great option if you don’t currently have the funds to purchase a new vehicle from a dealership.

We see a lot of confusion on the internet over these two terms, with many people thinking they mean the same thing. We’re here to help break it down for you and clear up any misconceptions you may have! Let’s look at buying versus leasing a vehicle from a dealership in terms of ownership, cost, and flexibility.

OWNERSHIP

One of the most significant differences between leasing and buying is ownership. When you buy a vehicle from a dealership, whether outright or through financing, you own it and can do anything you want with that vehicle. Even when you finance and make monthly payments on your vehicle, you can customize it and use it however you want. When you reach the end of your term agreements, you’ll fully own the vehicle, but in the meantime, that doesn’t prevent you from treating it like you already own it.

Leasing, however, is more like borrowing a vehicle from a friend or family member rather than owning it. You choose to pay for the vehicle for a set period of time—usually two to four years—but you must return the vehicle to the dealership after your lease expires. However, if you really like the vehicle, you have the option to buy it; this is called a lease-to-own program. Although some leasees—the person the vehicle is leased to—decide not to purchase the vehicle at the end of their term, many do since dealerships often offer discounted rates for leased vehicles.

COST

Cost is another big factor to consider when choosing between leasing and buying a vehicle. Buying a vehicle involves more considerable investment and higher upfront costs. The costs can include a down payment, taxes, registration fees, and other ownership fees not included with leased vehicles.

Buying a vehicle also involves higher monthly payments since you are paying off the listed price of the vehicle plus any interest added during your financing agreement. Leasing, however, gives you lower monthly payments. There are usually mileage restrictions when it comes to returning the vehicle, so be sure to check your mileage and not go over, or you could face financial penalties.

Another big cost factor to consider is vehicle repairs and maintenance. Buying a vehicle requires you to make any payments for repairs or maintenance out of pocket, and while you may not have to do much the first few years, you will definitely have to make more costly repairs as the vehicle gets older. When you lease, you are renting the vehicle during the early stages of its lifecycle, meaning there is less of a chance you will have to make a costly repair. Some leasing terms also include warranties for routine services during your lease, reducing out-of-pocket costs.

FLEXIBILITY

Flexibility can mean different things to drivers. Do you want more flexibility to customize your vehicle, or do you like the freedom not to be stuck with a vehicle long-term?

Buying a vehicle gives you greater flexibility to customize and mod it with aftermarket accessories like roof racks or a new exterior paint job. With a leased vehicle, you are not allowed to make major changes to its look and feel. Often, a modification not approved by a dealership will result in an immediate termination of the lease agreement or significant financial penalties.

However, the flexibility to switch vehicles as often as you like is a key advantage of leasing a new vehicle. Do you love trying the latest technology or driving the newest and fastest vehicles? When you lease, you open up your options to cars, trucks, SUVs and even EVs that you might not be able to afford otherwise. If you love to be on the bleeding edge of technology, especially in the emerging EV and hybrid vehicle market, then leasing a vehicle is the right choice for your lifestyle.

BUY OR LEASE FROM MCLARTY DANIEL IN BENTONVILLE, ARKANSAS

Interested in learning more about buying versus leasing a vehicle? Our sales and financial experts at McLarty Daniel Buick GMC in Bentonville, Arkansas, can help you demystify the options and steer you toward the right choice.

Visit us at 2517 SE Best Lane in Bentonville, or call (866) 812-3307 to speak with a sales representative. We’re ready to help!

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