Should You Lease or Buy a Vehicle?

Should You Lease or Buy a Vehicle?

All right—so the occupant of your garage is maybe wearing a little thin on you… but whether it’s because old trusty broke down or you’ve got your sights set on a 2022 model as soon as it hits the lot, you have options. When it comes to vehicle-buying, one of the first questions many ask themselves is, “Should I buy or lease?”

Here are a few of the considerations to weigh when obtaining a new vehicle.

Long-Term Repairs

One of the most stressful aspects of owning a vehicle is the potential for repairs. And sure, not all vehicles are built alike in terms of their ability to stand up to time, wear and tear, but most are likeliest to be in tip-top shape in their early years. For this reason, a lease can often be a pro—you’re driving the car for just the most repair-proof years of its life.

Score one for the lease in this case!

The Overall Cost

While leasing can have advantages when it comes to consistently operating a newer vehicle that requires less upkeep, it can also often cost you more over time. Think of it this way—you’ve heard that adage, “It drops in value the second you drive it off the lot,” right? Well, upgrading to new leased vehicles every few years means you’re always paying the equivalent of a brand-new loan each time you upgrade. And it’s always for a brand-new, top-of-the-line vehicle, versus a used vehicle that’s depreciated in value prior to your owning it.

When it comes to lifetime cost, buying can sometimes save you the most money. Then again, not all leases are built alike and some can actually save you money in the long run—case in point, the Sioux Falls Fed lease alternative…

No Resale Necessary

While owning a vehicle means you have an asset in your corner when it comes to purchasing a newer outfit, one benefit of leasing is removing the hassle of resale of your current vehicle. When you’re done, you can simply move on! No negotiating, scouting or price-warring necessary. Then again, one of the benefits of having a resell-able vehicle on the table when purchasing is having collateral for a down-payment that will almost certainly reduce your interest rate, overall principal due, etc.

Let’s call this one a draw—a resale can be a pro and a con! In fact, keeping your options open can be the most powerful truce between the two—a third alternative can sometimes be the best combo of the two…

The Down Payment

So how about that down payment? While a full-on purchase typically requires some form of down payment that can increase or decrease your interest rate, monthly payment or total owed depending on it size, a lease traditionally doesn’t require this step. This can be a big asset for those who aren’t in the position to drop a healthy amount of dough on money down from the jump.

And speaking of cost savings, if you’re leasing a vehicle for business purposes, often the auto can be written off on your year-end taxes—not too shabby!

One Last Thing…

All right, so the truth is, when it comes to choosing between leasing and buying, there’s a secret third option we should tell you about… It just so happens that Sioux Falls Fed features what’s called an alternative lease loan in its lineup— the DrivingSense™ financing option gives you the perks of a low monthly payment, a newer vehicle and guaranteed future value whether you walk away or keep to own.

Seriously—you’re going to want to check this option out before you head to the lot to start test-driving. Get all the facts here.