Are you wondering how you'll finance your next vehicle? Still not sure what the difference is between buying and leasing? Financing options can be a bit confusing. At Porsche Lehi, we want you to feel informed and in control of all of the decisions regarding your new vehicle. So we created the following Lease vs. Own guide:
- What is a lease?
A lease is a method of obtaining a new or used car. It offers an affordable means of driving a new car every few years. It involves only paying for a portion of the car's actual cost, with the expectation that you'll likely return the vehicle at the end of the lease. A contract is made between the lessor and the lessee for the use of the vehicle for a specified period of time and at a specified payment, both of which are subject to the stated terms and limitations outlined in the contract. With leasing, you don't own the vehicle--you get to use the vehicle until your lease contract is up. So you're paying for the use of the car, rather than actually paying for the car itself. You do, however, have the option to purchase the vehicle from the lessor at the lease's end.
- What are the benefits of leasing your vehicle?
If you don't drive too often or too far, or if you love always having the latest model, leasing may be the best option for you. There are many benefts to leasing a vehicle, including:
- What are the disadvantages of leasing?
If you regularly drive a lot, leasing may not be a great financing option for you. There are a few disadvantages to leasing:
- What does it mean to buy?
When you buy a vehicle, you own the vehicle and get to keep it for as long as you want. When you finance a vehicle, as opposed to leasing, you often take out a loan in order to purchase the car. You make payments to a financial institution. The duration of the term of the payments is dependent on the contract between the buyer and the financial institution from which the loan is from.
- What are the benefits of buying your vehicle?
If you drive a lot on a normal basis, and if you tend to put a lot of miles on your vehicle each year, buying may be a better financing option for you. Here are some of the advantages to buying:
- What are the disadvantages of buying?
There are a few reasons why buying may not be a great option for you or your current financial situation. Disadvantages include:
Frequently Asked Questions about Financing
- How much should I spend on a new car?
Experts suggest choosing a vehicle with monthtly payments that are no more than 20% of your monthly income. Don't forget to factor in proposed purchase price, the down payment, the interest rate/terms of your loan, and the length of the loan when calculating your monthly payments.
- How much should the down payment be?
A new car loses a significant amount of its value when you drive it off the lot. You should plan on your down payment being equal to at least 20% of the purchase price of the vehicle. If for some reason, you can't put down 20%, you still want to pay as much as you can on that down payment.
- Can I purchase my vehicle at the end of my lease?
Yes you can! If your lease includes a purchase option, you may choose to purchase the vehicle at the end of your lease. Your vehicle can be purchased at the end of your lease's term by contacting a finance representative at our dealership. Our team will give you a payoff quote and give you the title to the vehicle when that quote amount as been paid.