Buying vs Leasing
There Are Three Ways to Get The Vehicle You Want
ONE: You Can Pay Cash
You can buy the Honda vehicle outright with cash. That may mean taking money out of savings, home equity, or investments. If you’re looking to avoid car payments and can afford to do this, then this may be a good choice for you.
TWO: You Can Finance
For those individuals who are looking to keep a vehicle for many years, traditional financing is a great option. Auto loans can be financed for 1, 2, 3, 4, 5, 6, and 7 years, depending on the year of the vehicle. Once you have found a vehicle that suits your needs, our Finance Department can do your loan shopping for you. We work with local and national banks and Credit Unions to find the best auto loan for you.
THREE: You Can Lease
Financial experts everywhere agree: buy fewer things that depreciate, and more things that appreciate. A vehicle is a depreciating item which makes leasing a great alternative to buying for many car shoppers. Depending on your lifestyle or business needs, leasing a new Honda vehicle could be a very sensible option for you. If you usually don’t finish paying for a vehicle before you trade it, or if you pay it off and immediately replace it, leasing is a great option for you.
Over the last ten years, leasing has changed. It is now regulated to better protect consumers. The simplified leasing terms has made it an increasingly more popular option for many car buyers. The competition for leasing customers has also led car manufacturers to make both terms and prices extremely attractive. Depending on your circumstances, you can use your leased vehicle for business purposes. The lease payment or portion of it may be tax deductible (Consult your tax adviser for specific information).
Leasing Offers Three Advantages
Lower Monthly Payments . . .
By leasing, your monthly payment can be significantly lower than making standard retail payments. That’s because you are only paying for the time that you use the Honda vehicle. A down payment helps lower the payment on a lease more than on a loan. $1000 down is spread over 36-months vs. say 60-months and impacts the payment more.
More Vehicle For Your Money . . .
With lower monthly payments, you have the financial freedom to enjoy trim levels and get extra options that you might not have under retail financing arrangements. In essence, if you have a $350 per month budget, you can lease more car vs. financing.
Drive A Newer Vehicle More Often . . .
You can determine how long you want to drive the vehicle thanks to flexible lease terms. Typically, leases have a minimum and maximum lease period. Most people come to the conclusion that they would rather drive a new vehicle every three years, and keep it under warranty than drive a seven or ten-year-old car and have to keep making repair payments.
What Are the Options at the End of the Lease Agreement?
- You can trade in the vehicle for a new one.
- You can sell the vehicle outright.
- You can buy the vehicle for the guaranteed purchase price and own it.
- If your lease is paid in full, simply turn it in and drop it off.
Why Drop It Off?
It doesn’t make sense to trade in or buy the vehicle if it is worth less than the guaranteed purchase price. In a traditional finance agreement, if you owe more than what the vehicle is worth, you have negative equity. You either have to come up with the difference or roll it over into another loan. With a lease, if the value is less than the purchase price stated in your lease agreement, then drop it off and let the lease company deal with the negative equity–not you. Go get another vehicle and don’t worry about rolling over any negative equity.
(Please check your lease agreement for lease end options. Not all are the same. Also, consider any excessive wear and tear, and over mileage charges when you drop off the vehicle.)