Would you rather own the car you fell in love with at the CDJR dealership, or enjoy the flexibility of swapping it for a different model every year? Leasing vs. buying depends on how long you are planning to use a vehicle, depreciation concerns, monthly budget, and much more.
Leasing vs. Buying at Your CDJR Dealership
Buying: Potential to Build Equity
When you buy a vehicle, you don't have to return it. Equity is built with every monthly payment (if you finance your purchase) and you end up owning the vehicle, which is cheaper in the long term. Kelley Blue Book found that the average new vehicle costs $47,401 in January 2024, which means your investment will be worth around $27,493 at the end of a three-year auto loan, accounting for the 58% depreciation rate reported by Omni Calculator.
Buying: No Mileage Restrictions
Leased vehicles come with a mileage restriction, which is typically between 10,000 and 15,000 miles per year. When handing back the keys, customers are required to pay an additional charge for every mile they drive over the limit. Purchasing a vehicle is the right choice if you don't want the distance you can drive to be capped.
Buying: Freedom to Customize
Lease customers are expected to return the vehicle in its original condition, aside from normal wear and tear. If you customize it with aftermarket parts, voiding the manufacturer's warranty, you will be required to pay a fine.
Leasing: Lower Monthly Payments
According to a 2023 report from Experian, the average monthly cost of leasing a car is just $606, as opposed to the $738 average monthly auto loan payment. This makes leasing the right choice if you are operating on a tighter budget, or if you can't make a large payment upfront. Leasing is cheaper than financing because you are paying for the vehicle's depreciation instead of the full purchase price.
Leasing: No Depreciation Concerns
Every new car owner's nightmare is owning a car that is worth less than half of what they paid for at the end of the financing term. According to Omni Calculator, a new car retains only 69% of its value after the first two years, 58% after three years, and only 40% after five years. When you lease a car, you don't have to worry about depreciation, and you get to drive a new model every year or so.
Leasing: Lower Maintenance Cost
When you are leasing a car, you are usually driving a model that is still covered by the manufacturer's warranty, which may also include free service and oil changes. When you buy a vehicle, you will have to deal with high repair and maintenance costs once the warranty expires. Additionally, selling a vehicle with an expired warranty fetches you a lower price than one that is still covered by the automaker.
Find the right financing solution to drive home with your dream car. Explore the latest models at Ewald Chrysler Jeep Dodge Ram in Franklin, WI, and talk to our finance department about getting pre-approved for an auto loan.
