Since buying a vehicle is a significant investment, car dealerships offer various financing options. Understanding standard buying practices, as outlined below, will make it easier to determine which solution is best for your budget. To guide your decisions, here’s what you should know about leasing a car and buying it outright. 

3 Differences Between Leasing & Purchasing a Car

1. Who Owns the Vehicle

Although you can drive a leased vehicle off the lot, the car dealership is still the legal owner. For a fixed rate, you rent the car for a specific length of time, making monthly payments. After the lease is up, you can return the vehicle to the car dealer or buy it for the residual value. When you purchase a car, you immediately become the owner, and the value begins to decrease the moment you drive it off the lot. 

2. How Much You Pay Upfront

When you buy a new or used car, you are expected to pay the entire cost upfront or at least provide a 10 to 20% down payment. Putting down even more money can make it easier to secure a car loan. The initial fee for a lease may or may not include a down payment. Leasers often have to pay a security deposit and first month’s payment upfront. Costs can also include acquisition and disposition fees as well as the registration and licensing fees. 

3. Who Pays for Maintenance

Once you buy a vehicle, you have to pay out of pocket for maintenance or use car insurance and warranties to cover repair costs. This can lead to high costs if your car encounters any significant issues. When leasing, maintenance coverage might be included in the contract. However, you need to clarify this before you lease for insurance and financial purposes. You need to ensure that your lease is regularly maintained and cleaned, both inside and out. By neglecting routine upkeep, you could be faced with additional fees when it’s time to return the vehicle to the car dealership.

If you’re in the market for a used or new car, visit Swant Graber Motors in Barron, WI. The car dealership is known throughout Barron County for its inventory of used and new trucks, SUVs, and sedans by Dodge®, Chevy®, and Ford®. They can help you evaluate your needs and decide if purchasing or leasing a car is right for you. To inquire about vehicles currently on the lot, call (715) 537-5657 or search their selection online. So you don’t miss the Friday giveaways, join the dealership’s Facebook fan group to stay informed.