After spending a pleasant hour or two perusing the inventory at Glockner Toyota, going on a test drive, and asking questions of your friendly sales consultant, you're ready to choose one of our sedans, SUVs, or trucks to take home. You have two options for taking ownership of the vehicle: leasing or buying.
Leasing
When you lease a vehicle, you pay a monthly installment for its use. It is similar to renting a car but goes on for 12 to 36 months. Because you aren't paying to own the vehicle, you pay a lower monthly fee. If you own a business, you may be able to deduct the cost of the entire lease.
At the beginning of the lease, you make a drive-away payment that generally consists of the first month's installment, a refundable security deposit, taxes, license, registration, and optional down payment.
At the end of the lease, you turn in the vehicle and may end up paying some residual fees, such as extra wear and tear. However, you can walk away without any further obligation. You can also choose to buy the car or lease a new vehicle.
Going with a lease every few years means you'll always have the latest automotive advances and technologies. Your vehicle will generally always be under warranty, so you can drive with confidence knowing you are covered with your lease.
As for the disadvantages, you never end up owning the car and will be on the hook for monthly payments as long as you continue to drive. You're limited as to the number of miles that you can drive in a year. If you go over that limit, you can pay from 10 to 50 cents for each additional mile. You're also restricted as to where you can take the vehicle. Leased cars may usually not be driven to Canada or Mexico.
You cannot customize the vehicle and must return it in showroom condition. Otherwise, you're charged extra for excess wear and tear. If you decide to terminate the lease early, you'll be subject to early termination penalties that could amount to thousands of dollars.
Buying
You're most likely more familiar with buying a car to own it. If you're not paying the full cash price, you may require financing, which demands monthly payments. Before you drive off, you pay an initial sum, which may consist of a down payment, taxes, license, and registration.
Many experts recommend contributing at least 20 percent as your down payment. Your new car may depreciate as much as 20 percent in the first year. If your down payment is too small or non-existent, you may end up owing more for your purchase than your car is worth. Your loan then becomes upside-down, which may make it impossible for you to sell or trade in your vehicle until it is fully paid for.
Money is the primary disadvantage of buying a car. You generally spend more in the beginning because you're paying for the full value of the vehicle. Monthly payments on an auto loan are also generally higher than in a lease.
However, it is generally easier to qualify for financing than a lease. The Finance Department at Glockner Toyota can generally get you a loan even if you have bad or no credit. Our goal is 100 percent approval.
Another advantage of buying is that after you make all your payments, you now completely own your vehicle and can do anything you want with it. You can drive it for as long as you keep it maintained, without financial obligation. You can put as many miles as you want on it and take it across the border. You can also customize it as much as possible.
If you need extra cash, you can sell your vehicle to someone else or a dealer. You can also give it to charity for a tax deduction or trade it into us when you want to buy another car.
Making a Choice
If you need help choosing between buying or leasing, call the Finance Department at Glockner Toyota. We'll be happy to answer your questions and reveal your monthly payments using real-world numbers.
