Leasing vs. Buying a Car

When deciding whether to buy or lease a Nissan, there are many factors to consider. Most people would say that it almost always makes the most financial sense to buy a Nissan instead of lease one. This is true especially if you drive a lot, or have a family to take care of, as your car payments have a foreseen end date. Let's examine this debate more closely. 

FINANCING A LEASE

In a lot of ways, making payments on a leased Nissan is much like paying back an auto loan when you've bought a car. The amount you pay back is where the difference lies. When you purchase a Nissan car, the car payments you make each month are based on the vehicle's entire cost.

When you lease a Nissan vehicle, however, they are based on the vehicle's decline in value. You'll likely have paid off a substantial portion of what the car was originally worth by the time your lease is up. However, you will not be able to keep the car unless you come up with the remainder of the car's residual value to pay at the time your lease is up.

FINANCE CHARGES

There are also finance charges to consider when deciding to buy or lease a Nissan. Even though your monthly payments for a lease may be lower, the finance charges would be higher compared to a loan on an equivalent vehicle.

These charges may slightly be offset by lessee sales tax breaks in most states, but you can still expect them to be harder. There are other charges associated with leasing, too, which may only increase if you choose to lease after your initial term is up.

KNOWING YOUR GOALS

In some respects, it makes sense to lease a car if there are certain financial goals you'd like to achieve during the time you'll be driving it, and having a lower car payment means you'll be much closer to achieving them. For example, if you're looking to significantly increase your retirement fund, you could invest the remainder of the money that you would have spent paying back your car loan.

THE DANGER OF A VANISHING LEASE

Sometimes, the vehicles returned at the end of leases are worth substantially less than anticipated, thanks to rising gas prices and other factors. It could mean that the monthly payments on a lease were not actually enough to cover the vehicle's decrease in value, and the leasing company must sell the car at a loss.

To prevent that from happening, leasing companies may apply larger depreciation values than ever before. Higher estimated depreciation means higher monthly lease payments, which means leasing a car may financially look the same as buying a car, but with one factor making all the difference: you still won't own the car when your lease is up. Loan payments aren't affected by depreciation rates, either, so you have more security from the get-go.

WHEN SHOULD YOU BUY OR LEASE A CAR?

It really all boils down to your own personal preference. If you'd rather have a new car every few years without the hassle of selling and buying a car and that is worth the extra cost to you, then consider leasing. If you are more interested in owning a car and not worrying about car payments after a certain point, buying makes the most sense. Whether you're looking to buy or lease a Nissan soon, give us a call at Coulter Nissan. If you're in Surprise, AZ, and the surrounding areas, schedule your test drive today!