Buying vs Leasing Blog | Gerry Lane Cadillac
One of the decisions you’ll have to make when you want to own a Cadillac is whether you want to buy or lease. At Gerry Lane Cadillac in Baton Rouge, LA, our finance team is focused on helping you choose the option that works best for your budget. We can show you several plans that are tailored to your financial situation. Until then, here are a few guidelines when thinking about buying vs leasing.
Buying
Buying remains the most popular path to automobile ownership. If you don’t pay the full cash price, your initial payment generally includes a down payment and fees like taxes and registration. The remainder of the car cost is split into equal monthly payments that include interest.
Even while you make the monthly payment, you can do whatever you want to the vehicle. You’re free to drive it for as many miles as you can, especially if you do not care about how additional miles can lower the trade-in or resale value. You can also take it anywhere, including abroad. You’re free to customize it to your heart’s content and do not have to worry about wear and tear as long s you’re not concerned about reselling the vehicle.
The cons of buying begin with the initial costs and payments, which are higher than if you lease because you are responsible for the entire price of the car. Your vehicle will eventually go out of warranty, which incurs additional costs for maintenance and repair. If you want to get rid of your purchase, you will have to go through the inconvenience of selling it or trade it in for a newer version.
When you’ve paid off the vehicle, you own it without the need for additional payments. Your only additional expenses are for fuel, maintenance, registration renewals, and insurance. You can then pass the car on to someone else, resell it, donate it to charity for a tax break, or trade it in for a new vehicle.
Even while you make the monthly payment, you can do whatever you want to the vehicle. You’re free to drive it for as many miles as you can, especially if you do not care about how additional miles can lower the trade-in or resale value. You can also take it anywhere, including abroad. You’re free to customize it to your heart’s content and do not have to worry about wear and tear as long s you’re not concerned about reselling the vehicle.
The cons of buying begin with the initial costs and payments, which are higher than if you lease because you are responsible for the entire price of the car. Your vehicle will eventually go out of warranty, which incurs additional costs for maintenance and repair. If you want to get rid of your purchase, you will have to go through the inconvenience of selling it or trade it in for a newer version.
Leasing
Unless you run your own business where transportation is involved, you may be unfamiliar with leasing, which is a popular way of acquiring business vehicles due to its tax advantages. When you lease a vehicle, you basically rent it for 24 to 36 months. However, leases are available for as long as five years.
You normally have to start with an initial payment that can include the first month’s payment, a refundable security deposit, and various other fees such as taxes and registration. And then the entire cost of the least is divided into monthly payments that include interest. At the end of the lease, you can walk away from the car with no additional obligations, keep it for an additional cost, or lease a new model.
Leasing offers several advantages starting with lower monthly payments. You’re not paying for the entire cost of the car but rather for the depreciation that accrues during the time you have the vehicle. The lower payment may get you a better vehicle or a higher trim level with more features than you originally anticipated.
The shorter time period of a lease means that your car will always be under warranty. The Cadillac Bumper-to-Bumper Limited Warranty lasts for four years, for example, with the first maintenance being complimentary. You also get two years of navigation services and two years of OnStar Safety and Security Coverage. Repairs and subscriptions within these periods are free.
Leasing grants you a new car every few years with the latest technologies. At the end of the lease period, you don’t have to worry about trading in or selling your vehicle. You can leave it at the dealer or exchange it for something new.
The biggest disadvantage to leasing is that you never own the vehicle and are locked into a cycle of making monthly payments all the time. Ending the contract early can cost as much as staying with the lease contract. The number of miles that you can drive each year is capped. Exceeding that number costs extra. You cannot customize your vehicle and must return it in excellent shape with reasonable wear and tear. You may also have restrictions on where you can take the car. You may not be able to take it to Canada or Mexico.
You normally have to start with an initial payment that can include the first month’s payment, a refundable security deposit, and various other fees such as taxes and registration. And then the entire cost of the least is divided into monthly payments that include interest. At the end of the lease, you can walk away from the car with no additional obligations, keep it for an additional cost, or lease a new model.
Leasing offers several advantages starting with lower monthly payments. You’re not paying for the entire cost of the car but rather for the depreciation that accrues during the time you have the vehicle. The lower payment may get you a better vehicle or a higher trim level with more features than you originally anticipated.
The shorter time period of a lease means that your car will always be under warranty. The Cadillac Bumper-to-Bumper Limited Warranty lasts for four years, for example, with the first maintenance being complimentary. You also get two years of navigation services and two years of OnStar Safety and Security Coverage. Repairs and subscriptions within these periods are free.
Leasing grants you a new car every few years with the latest technologies. At the end of the lease period, you don’t have to worry about trading in or selling your vehicle. You can leave it at the dealer or exchange it for something new.
The biggest disadvantage to leasing is that you never own the vehicle and are locked into a cycle of making monthly payments all the time. Ending the contract early can cost as much as staying with the lease contract. The number of miles that you can drive each year is capped. Exceeding that number costs extra. You cannot customize your vehicle and must return it in excellent shape with reasonable wear and tear. You may also have restrictions on where you can take the car. You may not be able to take it to Canada or Mexico.
Recommendations
If you’re somebody who wants to drive the latest models every couple of years, consider a lease as a way to save money in the short term and improve your cash flow. If you hang on to your vehicle for many years after the payments or want more control over it, then buy it.
Deciding on one method or another involves many factors. We can help you pick the right path at Gerry Lane Cadillac. Contact us today.
Deciding on one method or another involves many factors. We can help you pick the right path at Gerry Lane Cadillac. Contact us today.