Car Leasing vs Car Buying
Which One Makes Sense For You?
Car Leasing vs Car Buying
To lease or buy? It’s a decision that thousands of Mercedes-Benz customers make daily, based on multiple criteria. Whether it’s economically viable to purchase a new Mercedes-Benz GLA or opt for an affordable leasing program on a G-Class SUV. Here at Mercedes-Benz of Sacramento, you’ll have multiple opportunities to choose from so you can drive home in the Mercedes-Benz of your dreams.
A popular question asked often is, what is the difference between leasing or buying a car? Are there different financing options, what are the upfront costs, length of terms, and what options do you have once the lease ends or you’ve paid off the loan?
These are all questions we’ll answer below. Let’s take some time to compare car leasing vs car buying. We’ll explain how they are different in multiple areas such as ownership, down payments, monthly payments, vehicle returns, and other important facts.
In the end, we’ll explain why Mercedes-Benz Finance departments are exceptional resources to help you customize a lease or purchase program that fits your needs and budget best.
What is a Car Lease?
A car lease is a financial arrangement between an individual and an automotive dealership/manufacturer that allows them to essentially rent a vehicle for a predetermined length of time. Once the lease has ended, the vehicle is returned to the dealership. However, many lease programs offer consumers to outright purchase the vehicle at the end of the term.
What are the Advantages of Leasing a Car?
A lease option offers Mercedes-Benz customers with several advantages versus the traditional automotive purchase.
Lower Monthly Payments: Most lease terms offer consumers lower monthly fees for leasing versus making a payment on a purchase or financed loan.
Try it Before You Buy it: It’s also common for those who lease a vehicle to try newer production vehicles as they arrive at Mercedes-Benz of Sacramento. Think of it as an extended test drive with a low monthly payment.
Less Hassle: Leasing typically is a straight-forward process, with little to no negotiation, multiple lender applications, and more. Once the term is complete, you simply return the vehicle to the dealership where it was leased – it’s that simple.
What are the Disadvantages of Leasing a Vehicle?
While there are several perks to leasing – there are some potential disadvantages that should be considered. It’s a major financial decision, always consider this before signing on the dotted line.
More Expensive than a Purchase: If you opt to return the vehicle once the lease term is up, this really isn’t an issue. However, if you really like the Mercedes-Benz, and want to keep it, it can cost you more in the long-term.
You’re Limited on Miles: Every lease term has restrictions on how many miles you can drive during the terms of the lease. For example, most lease programs restrict drivers to 12,000 miles per year. While this might be OK for around town driving, long commutes to the Bay Area or other cities around Sacramento can consume miles quickly.
You’re Responsible for the Condition of the Vehicle Upon Return: A lease term also leaves the individual or company to be responsible for returning the vehicle in quality condition. If the vehicle is damaged, either exterior, interior or mechanical, due to negligence – you’ll have to pay additional return fees.
No Customization: A leased vehicle must be returned to a dealership without aftermarket or even OEM upgrades or enhancements.
Comparing the Differences Between Buying and Leasing a Mercedes-Benz
If you’re considering a lease vs traditional automotive purchase via financing, there are some significant differences. Let’s break down some of the common areas involved in automotive buying and explain how a purchase differs from a lease.
Ownership: When you buy a vehicle – you own it outright once the financial commitment has been met. You’ll receive a title and can trade it in when you buy a new one or sell privately.
When you lease, you don’t own the vehicle. You’re renting it and must return it to the dealership in good condition.
Up Front Costs: Most purchase programs involve trading in an existing vehicle. This is typically considered your down payment. However, financing department specialists can customize a loan program from little to no down payment.
With a lease, there is typically a down payment required. This typically includes similar terms as renting an apartment or home – where you pay first and last month’s payments, a security deposit and other applicable taxes or fees.
Monthly Payment: The monthly payment on a lease is typically less than a purchase. However, the terms of your car loan is mainly determined based on your down payment, length of time for the loan, the credit score and interest rate provided by the lender
Early Termination: When you purchase a vehicle, you can sell it anytime to anyone you wish. The auto loan must be paid off however, for the title to transfer to the new owner. Early termination of a lease can be done but the individual will acquire extra fees.
When in Doubt – Ask the Finance Experts at Mercedes-Benz of Sacramento
Purchasing or leasing a luxury Mercedes-Benz is a major financial decision. There are many pros and cons to leasing and purchasing a vehicle. This is where the experience and professionalism of the finance department at Mercedes-Benz of Sacramento can be an exceptional resource of factual and accurate information.
Anytime you have questions about a car lease vs car purchase, make sure to set up an appointment with the finance department at Mercedes-Benz of Sacramento. We’re here to serve you.