Buying vs Leasing in New Jersey

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Buying vs Leasing in New Jersey

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You have a lot of choices to make when shopping for a new car. From the make and model to the color and features, simply picking the car is enough to make your head spin. Then, once you’ve picked the right car for you, you must decide how you want to pay for it. There are two main ways to pay for a vehicle. You can choose to buy, oftentimes referred to as finance, or you can lease. A vehicle is oftentimes the second largest purchase of a person’s life, next to a house. Therefore, you want to make sure you make the right decision. To help you do that, you can learn more about the benefits of buying and leasing and how to choose the right method for you on this page. Keep reading below to learn more!

Benefits of Buying a New Car

Buying, otherwise known as financing, is when a financial institution, such as a credit union or bank pays for the vehicle, and the customer pays the bank back each month. There are four factors that make up an auto loan. The first is the total cost of the vehicle, which determines the bank’s loan amount. The total cost can be reduced upon purchase by using a down payment. The next factor is the interest rate. This is determined by the value of the vehicle and your credit score. Next is the loan term, which lasts for anywhere between 24 and 60 months in most cases. However, in order to help get a lower monthly payment, loan terms can be stretched up to 84 months, depending on the value of the vehicle. There are many reasons that people choose to finance a vehicle. The most popular reason is the flexibility the loan provides. When you finance a vehicle, it doesn’t matter if you drive 10,000 miles or 30,000 miles each year, your monthly payment will remain the same without worrying about mileage limits. Additionally, you can customize the vehicle any way you’d like and service it at any shop you choose. Customers opting to finance their new vehicle have the option to enroll in Guaranteed Asset Protection, more commonly known as gap insurance. Gap insurance covers the remaining cost of the vehicle when it is deemed a total loss after an accident. Lastly, once the entire loan amount is paid off, the title is given to the customer, who then becomes the sole owner of the vehicle. At this point, the customer can choose to trade in the vehicle or continue driving it without any payments.

Benefits of Leasing a New Car

Now that we’ve learned about financing, which is borrowing money to purchase a vehicle and paying it back monthly over a pre-determined period of time, it’s time to go over leasing. When you lease a vehicle, you are essentially borrowing the car from the dealership and paying for it monthly. Leasing typically accomplishes lower monthly payments, as you’re paying for the value of the vehicle instead of its total cost. In most cases, lease agreements typically last for 12 to 36 months and come with a 12,000 or 15,000-mile yearly limit. However, the mileage limit can be adjusted to fit the customer's needs. If you’re a driver with a shorter commute and enjoy getting a new car every couple of years, leasing is an excellent choice for you. When you lease a vehicle, service is taken care of by the dealership’s service department. Additionally, since the customer is borrowing the vehicle, it is automatically enrolled in gap insurance, the cost of which is rolled right into the monthly payment. Leasing a car rarely requires customers to make a down payment, and if one is made, it’s normally smaller than one usually made for financing. When the lease agreement expires, the customer has three options. They can choose to purchase the vehicle by paying the remaining amount either upfront or by financing. You can also choose to return it or trade it in for a new vehicle.

How to Decide to Lease or Buy a New Car

Now, we’d like to help you decide which option is best for you. The first step is to look at your finances. While doing this, determine how much money is coming in and going out each month to see what you can afford to pay monthly. While observing your finances, you should also see how much you can afford to use for a down payment. You should also reset your current vehicle’s trip odometer and drive as you normally would for a month. Then, multiply the odometer reading after a month by twelve to get a rough estimate of how much you drive each year. This will help you decide if buying or leasing a vehicle is right for you, and if you choose to lease, it will help you decide which mileage limit fits your needs. Having this information when you come to buy a car will help streamline the process and allow our sales and financing teams to help you best.

Buy or Lease your Next Car at Fullerton CDJR!

While there are a lot of decisions to make when buying or leasing a new car, it doesn’t need to be stressful. Here at Fullerton Chrysler Dodge Jeep Ram, our sales and financing teams will work tirelessly to provide you with a relaxed environment to help take the stress out of car shopping. Additionally, when you finance with us, our financing experts will do all of the heavy lifting to get you the loan or lease that works for you so you can focus on the excitement of getting a new car. Come see our sales team in our showroom to start your journey toward a new car. We hope to see you soon!