Episode 25: Leasing vs Buying

KEY TAKEAWAYS:

  • When you’re shopping for a new vehicle, it’s important to do some online research on interest rates available on auto loan financing.
  • Leasing a vehicle is essentially renting it. A fixed amount is paid every month to continue driving it, and once the leasing period is over you have the option to return the vehicle or buy it.
  • Your leasing payment is based on the price of the car, the interest rate you agreed to, the number of years in the leasing period, and the car’s expected resale value when the leasing period ends.
  • The amount you pay over the leasing period for a car is the amount it’s expected to depreciate, or lose value during that leasing period.
  • When you purchase a vehicle with the help of an auto loan, you own the car and once your loan is paid in full, you own the car free and clear. If you lease a car, you make payments on it for the leasing period then only have the option to buy the car after the period is over. You will be making car payments and paying interest for much longer.
  • Leasing does not make sense for people who drive a lot of miles or do don’t well with vehicle upkeep. The extra mileage and possible damage will need to be paid for in full at the end of the leasing period.
  • GHS is always here for you! Stop in to a branch or call us if you need us at (800) 732-4447.