You’re standing at the Chevrolet dealer in your town and you want to drive one of the vehicles home to be your ride.
The biggest question you have to answer is whether you should lease or buy the vehicle that you’re looking at. This decision is only offered for new models, which means you’re going to be the first person to enjoy the benefits that the vehicle offers, but you have to make the right decision.
Differences Between Leasing and Buying
Ownership
Buying – The purchase of a vehicle means you sign papers for an auto loan. This loan is split into payments with you paying some of the principle and interest of the vehicle based on the APR. Once the loan is paid in full, you own the vehicle.
Leasing – Your Chevrolet dealer will likely have several lease programs of varying length. A lease is an agreement for you to use the vehicle during that time and pay only the depreciation of the vehicle. When the lease has ended, you will return the vehicle to the dealership.
Early Termination
Buying – When you purchase your vehicle at the local Chevrolet dealer, you’ll want to know that your loan can be paid off early without a penalty. Most of the time, this isn’t a problem, and paying off the loan early can save you a lot of money in interest.
Leasing – Returning a vehicle prior to the end of the lease term almost always results in a substantial penalty that you must pay. Most of the time, you can end the lease early, but you’ll have to pay the rest of the balance due that would take you to the end of the lease.
Future Value
Buying – Your vehicle is going to depreciate over time and that will lower the value compared to the price you pay. Thankfully, because you paid to purchase a vehicle you can trade it in, sell it to another person (once it’s paid off), and get something out of the vehicle when it’s time to move onto your next ride.
Leasing – You can often purchase the vehicle you’ve been driving at the end of your lease term, but that would require one large payment or for you to finance the vehicle for an additional period. Your Chevrolet dealer team can help you understand what you might have to pay if you want to purchase your leased ride.
Wear and Tear
Buying – The vehicle you purchase at the Chevrolet dealer is yours to keep. How well you take care of it will determine how well it takes care of you. There aren’t going to be additional fees on your loan if you don’t care for the vehicle, but you certainly want it to outlast your payments.
Leasing – Many times, people will lease a vehicle and neglect the service and repairs needed. Not taking good care of a leased vehicle could result in severe penalties when the vehicle is returned. The leasing company expects to be able to sell the car in very good condition when you return it, which means you want to avoid excessive wear and tear.
Customization
Buying – If you want to customize your vehicle, go ahead. No one is going to stop you. A good rule of thumb is to ensure the customization you add to your vehicle won’t void the factory warranty, but that’s truly the only concern you have when buying a vehicle.
Leasing – The vehicle you’ve leased doesn’t actually belong to you. It belongs to the leasing company and therefore you won’t be allowed to customize it to add items to it that didn’t come with the car. The leasing company wants to be able to sell the leased vehicle with the same equipment that it had when you drove it off the lot.
Mileage
Buying – Drive as much as you want, this vehicle belongs to you. While high mileage can reduce the value, if you know you won’t sell or trade your vehicle, you can drive as long and as far as you like and not worry that you’ll have to pay more to do so.
Leasing – Every lease agreement has a mileage limit listed in the paperwork. Ask about this factor when you lease from your nearby Chevrolet dealer and make sure you have enough miles for the time you’ll have the vehicle. If you drive more than the mileage allowed, you’ll end up paying a per-mile fee when it’s time to end the lease term.
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