Blog

Should I Lease or Finance My Next Car?

Leasing or Financing a Car

Leasing vs. Financing

Comparing the two options

Should I buy or lease my next car? In short, there is no clear-cut answer. There are pros and cons to both options. The answer for you will depend on your finances and lifestyle. Financing, or buying, a new car is often cheaper long term, but usually requires higher monthly payments and a higher down payment. Leasing a new car will keep you in the newest models with lower monthly payments, but may surprise you with mileage and wear and tear fees at the end of your contract. We've written a few pros and cons down to help you decide what is best for you. Lease or Buy Pros and Cons

Financing a Car: Pros

Monthly Payments: Once you have finished paying off your car, it is yours. Until you decide to buy another car, you won't have a monthly payment to worry about. The amount you will pay monthly is determined by several factors; including the down payment amount, interest rates on your loan, time-frame of the loan, trade-in value from a previous vehicle. Equity: Throughout the length of your loan payments, you're building equity, as long as your payments are outpacing the depreciation of the vehicle. Wear and Tear: If you intend to use your car for anything other than impressing clients, this can be a huge pro. Life happens. Average wear and tear is covered in a lease, but you know you and what how you will use your car. If you don't want to be worried about every scratch and crumb, stick to buying your vehicle. Modifying the Vehicle: Once you drive the car off the lot, the car is yours to customize however you would like. Mileage: You can take as many road trips as you would like. There is no mileage caps. Credit Score: It is often easier for someone with not-so-good credit to finance a car than it would be to lease one. You may end up with high interest rates, but at least you would have a car.

Financing a Car: Cons

Monthly Payments: Depending on interest rates and your down payment, your monthly payments could be higher. Keep in mind that a purchased vehicle is considered a depreciating asset. Meaning it will lose value over time. Value goes down 20% just for driving it out of the lot. If you want to sell it later, or use it for trade-in value, it will not be worth what you paid for it. Maintenance: The longer you have a car, the more repairs it will need and you will be responsible for them. Extended warranties are often available, but they won't cover everything. Once the car's warranty runs out, you will start having to pay out of pocket for all repairs.

Leasing a Car: Pros

Monthly Payments: Usually cheaper each month and leased cars used for business can be deducted from your taxes. You only pay the difference between the car’s price and what it’s expected to be worth at the end of the lease, or its residual value. Maintenance: Many leases last about 3 years so the car is usually covered under warranty the entire time. You still must maintain the car, oil changes, tire rotations and recommended maintenance, but most unexpected repairs will be covered. Newest and Shiniest: If you like having the nicest car on the block every 2-3 years, this is the option you'll want. You will get a new car about every 3 years and you won't have to worry about selling the old one. You bring the old keys to the dealership and they hand you the new keys. Of course, there will be a little more to the process, but in a nutshell, it's really that easy.

Leasing a Car: Cons

Extra Fees: Mileage Overage Fees, Wear and Tear Fees, and it can be expensive to break your lease agreement early. Buying the Vehicle: You may decide you want to buy the car at the end of your lease agreement. If so, you will then have to take out a loan (if you don't have the cash on hand) that will often have higher interest rates because it is now a loan on a used vehicle. Modifying the Vehicle: Be prepared to have all modifications undone before you return the car. You borrowed the car for a few years, the dealership likes it returned in the state it was given to you. Credit Score: Leasing is rarely even a option if you have poor credit. It is not impossible, but can be more difficult.

ConclusionLeasing or Financing a Car

Driving a new car is exciting. Always make sure to check and understand the terms of the financing option you choose. We always recommend running the numbers yourself. Be honest about your budget, needs in a vehicle, your lifestyle and your credit history.   Contact Waldorf Honda Today!

Recommended Posts

Letters PUERTO RICO carved in soft white sand of tropical beach in Puerto Rico

The Car Market In Puerto Rico After The Hurricane

On, September 20th a category 4 hurricane that carried 150 mph winds made landfall on Puerto Rico. It has left thousands without power, water, and with limited resources. Now as they try to get back to rebuilding their lives, jobs, and communities they are finding it is very difficult to do so with the lack of transportation. The car sales have naturally decreased dramatically after such a devastation to the island. About 1/4 of the cars were lost to flood damage. Many of the damaged vehicles will most likely end up at Insurance Auto Auctions. We can only imagine that the demand for a vehicle is very high. With people needing to return to their regular daily lives, commuting for work, and taking their children and getting them back to a good routine at school. Simply the supply is just too low when it comes to purchasing a vehicle. But they are doing everything they can to change things little by little, and make them more available. A Fact To Remember We will remember just 6 months ago, when Puerto Rico claimed the Guiness World Record for the longest parade of classic cars: 2,491. It is evident that puerto rico has one of the highest rates for car ownership in the world. Positives For The Future Taking one day at a time, we will slowly see little improvements. As different organizations, associations, and families that were not effected by the hurricane season this year, will continue to try to pull together what they can to donate to the island and the people there. Getting the remainder who stayed on the island back on their feet.

honda cars parked in front of a dealership in a downtown setting.

The Future Of The Car Industry

Gas Prices sure can increase quickly, but how long does it take them to come down? It seems like we are constantly watching the prices rise at a rapidly increasing rate. What does this mean for the average consumer? It could mean that we are starting to second guess upgrading to a bigger vehicle, with the extra space and power. Which could signify that we are starting to search for a smaller vehicle one that gets better gas mileage and has a smaller engine. But just because we might need to start looking for a car with a smaller engine that won't consume as much fuel, doesn’t mean we have to downsize the power that we want as well. Honda Accord now makes a Turbo Charged Engine. It is a smaller engine but the turbo gives it the boost it needs to make up for any power losses. Definition A turbocharger, or colloquially turbo, is a turbine-driven forced induction device that increases an internal combustion engine's efficiency and power output by forcing extra air into the combustion chamber. Benefits of a Honda Accord With a Turbo Charged Engine Increased Horsepower- Makes more power at a lower rpm It feels more relaxed to drive Increased reliability of engine Higher Efficiency- Runs off energy that is typically lost in naturally aspirated engines, thus the recovery of the engine improves the overall efficiency of engine What Else is Changing in the Car Industry? We have found more and more cars are being made with aluminum bodies. There are some advantages of this as well as disadvantages. Read along with us as we go over a few. Pros 1. Lightw eight 2. Strength and Durability 3. Safety Benefits When applied to an optimized automotivebody structure, aluminum can provide a weight savings of up to 50 percent compared with the traditional mild steel structure. Due to the reduced weight, the car will use less fuel. Aluminum body structures are equal or superior in strength to steel and absorb twice as much crash-induced energy. We have found  that with Honda they tend to make their hoods and trunks with aluminum which saves on weight, but usually does not affect body shop and insurance rates. Cons Now the we considered the pros. When dealing with aluminum it does not come without its disadvantages as well. 1. Higher costs to repair 2. Inability to be welded easily 3. In some situations it is more difficult to paint Aluminum is more expensive than steel, as much as two to three times more. A drawback that comes along with it being more expensive, is you will find that you are spending more money at the body repair shop. When it comes to welding it isn't as easy as if a steel door panel needs to be repaired. Usually with steel it can be welded back together easily, primed and repainted to look like no damage was even done to the vehicle, unfortunately this can't be done with aluminum. Now, we wait and see, to find out exactly what the future of the car industry will decide to do. Will they completely make the switch to aluminum? Or will they keep using steel because it is what we all know best. Only time will tell.

Dealer Vehicles in Stock. Brand New Cars Awaiting Clients on the Dealer Parking Lot. New Cars Section.

History of Dealerships in Waldorf

The Auto Industry has been very good here in Waldorf MD. Even though like every business we all have our ups and our downs, highs and our lows of sales, but we'd like to say we are pretty proud with the results of the car sales in our town. We have had some major success with our dealership and we have also seen the success of those around us. Here are a few dealerships that always stayed on our radar. Ken Dixon Auto If we all don’t know who this dealership is, I’m sure at one time we have all used one of their pens. They actually ran a pen campaign for over 30 years, advertising their dealership. The outcome? Well, it worked! Everyone had one of their pens and knew who they were. Ritter Chevrolet A faithful dealership. Always making sure to keep their customers satisfied with their purchases. After all, most buy cars to last a long time, and Ritter Chevrolet was always there to help their customers make the best choice. B & B Auto With an experienced sales staff, you would always find a friendly helpful salesman to help you with your vehicle purchasing needs here. With nothing but great feedback and reviews from B & B Auto, you were without a doubt ready to find the right salesman to help you find the car that you needed. From the first car made to nowadays we all have seen a difference to where it all began. When car hunting we all look for the same thing when dealing with dealerships. Honesty, Great prices, and Salesman with knowledge. The dealerships here in Waldorf have had a great history and reputation of displaying those qualities exactly. If You Want More Information On Our Used Car Dealership in Waldorf Maryland - Visit our Website.