Leasing used to be seen as the way fleets and luxury car buyers financed their vehicles, but here at Waite Toyota we can tell you that it's now becoming an increasingly popular option for just about anyone. Most who actually take the plunge with leasing soon can't imagine getting a new vehicle any other way, but others who've never leased can understandably think buying is better. So, let's take a look at the differences between leasing vs. buying at Waite Toyota and weigh-up the pros and cons.
Difference between buying and leasing
To understand the pros and cons of leasing a Toyota or buying a Toyota, we first need to look at what each term means. If you buy a vehicle you own it, so no finance company has any hold over it. There are no monthly payments and you're free to drive it when you want, how you want, and for as many miles as you want. Leasing a car basically means taking it on what is effectively a long-term hire agreement. But if it was just that simple, it might be hard to see why anyone would lease over a more traditional auto loan or buying outright. The answer to why people choose to lease is actually very simple really and boils down to just one thing, which is cost.
Costs involved with leasing
There are costs to think about with leasing a vehicle beyond the monthly payments, but the really good news is most of them are only really potential costs that can be avoided. Obviously, the monthly payments and the upfront deposit are the headline costs with leasing, although even a deposit is sometimes optional. Those potential costs mostly come into play at the end of the lease when the vehicle is handed back. If you've done more miles in the vehicle than you said you would at the start of the lease there will be a per-mile charge for the excess miles covered. Also, if the vehicle's condition is worse than acceptable wear and tear as set out in the lease terms and conditions, there could be a charge to put things right again. Of course, if you look after the vehicle and you stay within the contracted miles, no charges will apply.
Real costs of buying
All you pay to buy a vehicle is the upfront price, right? Wrong! The costs involved with buying are perhaps not as obvious as they are with a lease, but they're still there. If you cover a lot of miles and your vehicle isn’t in great shape, it will naturally attract a much lower price when you eventually sell or trade it in. And then there's the single biggest cost associated with buying a vehicle, which is the amount the vehicle's value falls by over the period you own it, which is known as depreciation. Three years after buying a new vehicle, as much as 60 percent or even more of the initial purchase price can be lost. There are no such worries with leasing as the vehicle goes back at the end of the term, so what it is or isn’t worth is of no consequence to you whatsoever.
In simple terms, if you only intend to keep your new vehicle for two, three or four years then leasing can be considerably less expensive than buying. If you're someone who keeps a vehicle for longer, buying can start to look less expensive as the rate of depreciation slows as the years go by and the value of the vehicle reduces. Don’t forget though, once you're outside the manufacturer warranty period potentially expensive maintenance costs can come into play, and that's before considering inevitable wear and tear items like tires, exhausts etc. The bottom line is therefore that in purely financial terms, leasing from us here at Waite Toyota over short period is likely to be considerably less expensive than buying.