New Vehicle Leasing vs. Buying — Which Option Is Best for Alabama Drivers?

Many car buyers find themselves facing the “vehicle lease vs. buy” dilemma. If you’re one of them, our team at Hyundai of Auburn, Alabama, has put together a comprehensive guide to help you make an informed choice.

New Vehicle Lease Specials

The Basics — Leasing vs. Buying

Before we compare auto leasing vs. buying, let’s find out how the financing methods work. In most cases, you need to get a car loan from a bank, credit union, or dealership before buying a car. You’re usually required to pay a percentage of the purchase price as a down payment upfront. The rest will be paid in monthly installments plus interest until the end of your loan term, which can range from 36 to 96 months. Once you’ve paid off your loan, you’re the legal owner.

Leasing is essentially renting a vehicle for a long time, typically 24 or 36 months. You don’t always need a down payment for a car lease, and the total cost is split into monthly payments that include interest. When your lease period is up, you won’t own the vehicle, but you usually have the option to purchase it. Typically, leases come with mileage restrictions and wear-and-tear requirements.

Advantages and Disadvantages of Leasing a Car in Alabama

Is it smarter to buy or lease a car? It depends on your financial circumstances and driving needs. Let’s compare auto leasing vs. buying by looking at auto leasing’s pros and cons.

Pros

Below are some advantages of leasing a vehicle:

• Lower monthly payments: The main advantage of leasing a car vs. buying one is that your monthly car payment will be significantly lower. This allows you to reduce your monthly expenses or get a better vehicle.
• Access to the latest technologies: With leasing, you can get behind the wheel of a new car more often, so you’ll always have access to the latest automotive technologies, such as infotainment and driver-assistance features.
• Warranty coverage: Another benefit of leasing a car is warranty coverage. Unless you get an extended-term lease agreement, you’ll probably have warranty coverage throughout your lease term, saving you money on repairs.
• No sell or trade-in: If you lease instead of buy, you don’t have to sell or trade in your vehicle when it’s time to get a new one. Simply return the car to the dealer at the end of your lease, and you can lease a new one if you want to.

Cons

Here are some disadvantages of leasing a car:

• No ownership: Although leasing a car has many advantages, this option doesn’t lead to car ownership. If you’re looking for a lease plan that comes with a buyout option, Hyundai of Auburn offers lease-to-own deals in Auburn, Alabama, and other nearby cities.
• Endless car payments: When leasing, you’ll never own the vehicle, meaning that you’ll always have to make car payments. You can expect each successive lease to be more expensive as vehicle prices rise.
• Annual mileage limit: Most of the time, car leases come with an annual mileage cap. If you exceed the limit, you’ll be charged excess mileage and wear-and-tear penalties.

Advantages and Disadvantages of Buying a Car in Alabama

Even though it may be costlier at first, buying a car can be more beneficial over the long run. If you plan to keep your vehicle for several years and want the freedom of ownership, buying may be the right option for you. Below, we weigh the pros and cons of purchasing a vehicle.

Pros

Below are some advantages of buying a vehicle:

• Car ownership: Car ownership is a significant benefit of buying a car vs. leasing one. Once you obtain ownership of your vehicle, there are no more car payments, and you can do whatever you want with it, including selling or trading it in.
• Customization freedom: When you buy, there are few limits to how much you can customize your vehicle. Car leases may allow you to make certain modifications, but you’ll have to remove them before returning the car.
• No mileage limit: The best advantage of buying a car is that you don’t have mileage restrictions. You can drive as much as you want without worrying about penalty charges.

Cons

Despite its benefits, buying a car also comes with some downsides. Consider these disadvantages before making a decision:

• Higher payments: If you get an auto loan, you have to be prepared to face higher monthly payments than if you lease. It’s going to cost you more for several years, but it’s less expensive to drive after you’ve paid off your loan.
• Larger down payment: Buying usually requires a substantial down payment, which can be at least 10% of the car’s purchase price. As such, it’s a less feasible option for drivers with smaller savings.
• Higher repair costs: When you purchase a vehicle, you’ll probably drive it for longer than its warranty term. Once the warranty expires, you’ll be responsible for covering the cost of repairs.

Critical Factors To Consider

When considering auto leasing or buying, there are a few things you need to take into consideration, such as your budget and driving needs. If you’re looking for an affordable way to get a new vehicle, then leasing is a better option due to its lower upfront costs and monthly payments, but it’s more expensive in the long run. You can use a lease vs. buy car calculator to compare costs.

If you drive your vehicle more than the average driver, it’s a good idea to purchase instead of lease a car. Buying allows you to drive as much as you want without paying penalties. A car lease may not be financially sensible if you drive a lot, as the mileage and wear-and-tear penalties can increase your costs considerably.

Making the Right Decision for Your Alabama Lifestyle

If you need expert advice on choosing automobile leasing vs. buying, consider contacting our knowledgeable and helpful staff at Hyundai of Auburn, Alabama. Contact us or call us at 334-321-0777 we’ll answer any questions you have about auto financing and help you explore your options and choose a loan or lease plan that matches your budget and lifestyle. Additionally, we have an extensive and diverse inventory of new Hyundai vehicles, so you’ll have no trouble finding your perfect vehicle on our lot.

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