finance department

Lease vs Buy

Comparing Leasing a Vehicle with Buying a Car

Leasing is a fast and easy way to get a car with little or no down payment. Monthly lease payments usually are less than loan payments for a new car. Leasing appeals to individuals who use cars for business, need a car for a limited period of time, trade in their cars at regular intervals, want to know their monthly costs in advance, or want to invest their cash in different activities. Leasing, however, has its share of limitations and disadvantages. The following table provides an overview of the comparison between leasing and buying.

To Buy or to Lease?

Unsure whether you should lease or buy? Simply review the statements below to find out what option best suits your needs. You can also call one of our financing experts at Ebersole Honda to discuss your options and learn about the latest rates.

If you can answer yes to the majority of these statements, leasing from Ebersole Honda might be the best option for you:

  • I typically drive less than 15,000 miles a year.
  • I don't usually get emotionally attached to my car.
  • I've got to have (real) new car smell.
  • I like the security of driving a car under warranty.
  • I usually choose a car that I can't afford.
  • I am willing to trade ownership for low, monthly payments.
  • I typically drive less than 15,000 miles a year.

If this sounds more like you, buying might better suit your needs. Our financing experts can help!

  • I always drive over 15,000 miles a year.
  • I like to customize my car by tinting windows, adding pinstripes, sound system, etc.
  • I usually get emotionally attached to my car.
  • I love to see those payments dwindle to nothing.
  • My current car is more than 4 years old.
  • I like to do my own repair work.

When deciding whether to buy or lease it is important you know your options. A few factors that will play into the decision are average yearly mileage, length of ownership, and resale value.

The decision to lease or finance depends on many factors, but most customers make the decision based on monthly payments and how long they typically drive their vehicles.

In general, customers who lease prefer to drive a new car every 2-3 years and appreciate making lower monthly payments. For certain business customers there may also be additional tax advantages with leasing.

Customers who finance their vehicles tend to drive them for five to 10 years and appreciate driving without mileage limitations.

Explore the detailed benefits of leasing and financing below.

Leasing

Drive the Vehicle at Its Prime

In a lease, you do not purchase an automobile. You contract to use it for the first, and best, period of its life. Following are some additional benefits to leasing a Honda.

Less Cash Up Front

One of the biggest advantages of a lease is that it does not usually require a substantial down payment. In many states, you can even pay the sales taxes as part of your monthly lease payment, rather than in a lump sum.

Lower Monthly Payment

If the finance period is the same, your monthly payments will be lower when leasing (vs. financing) because your payments will be based on the vehicle's estimated depreciation. (You are contracting to use a portion of the car's value, rather than buying the entire car.)

A New Car More Often

Your taste and preference may change, and a short-term lease makes it easy to drive a new car more frequently. Additionally, you may have needs for a larger or smaller car in a few years, and a lease makes it easy to plan for such changes.

Guaranteed Future Value

You don't have to worry about resale value. If your car depreciates more than the estimated residual value in your lease contract at full term, you can turn it in at the end of your lease term. But if it's worth more, you can buy it and keep it or resell it. A lease gives you an option.

Tax Advantage for Business Use

People who use a lease car for business may find larger tax deductions with leasing than with buying a vehicle. Check with your tax advisor. Buying

Buying

Get the Most Out of Your Vehicle

If you typically keep your vehicle for five to 10 years, then traditional financing may be your best option. With our competitive rates and flexible terms, Honda Financial Services just may be your best choice in financing your new vehicle.

Ownership Equity

Payment by payment, your ownership equity may increase. And the longer you drive the vehicle after your contract is complete, the more value you derive from your investment.

No Restrictions on Mileage

This is important to consider if you drive more than 12,000 to 15,000 miles per year.

Make Changes to Car's Appearance

You can alter the interior or exterior to suit your taste (though your choices may affect the resale value).