Diehl Toyota Pittsburgh

 

Buying a new Toyota car, SUV or Truck can be overwhelming, with many decisions to be made - which type of car, which model, financing options, etc. If you’re considering a new Toyota, you have the option of buying a car outright or leasing one. Each option has its own benefits and drawbacks, which should be taken into consideration when making your decision.

Buying

Pros

The main benefit of buying a new car is that when it is paid for in full, the vehicle becomes yours to do with as you please. You are not locked into any fixed ownership, and you can make modifications or alterations to its appearance, and sell or trade in your car when you choose to.

Insurance rates rates and limits are generally lower when buying a car, and you are also free to travel without taking mileage into consideration without any penalties or restrictions.

Cons

The biggest drawback to owning would be the monthly payment of the car. Monthly payments for a new car are generally higher than those that are leased, and most dealers require some sort of down payment, which will increase your out-of-pocket expenses. New cars depreciate considerably in the first few years (20 to 40 percent), so the monthly payments you will be making will have gone primarily towards the interest in your loan, which leaves you with little equity in the first couple of years.

Leasing

Pros

Leasing a car has its own benefits in terms of finances: a lease requires little or no down payment, no upfront tax payments, and the monthly payments are generally lower on a leased vehicle. If you are a business owner, there are also tax advantages if you are using your car for business purposes.

A lease allows you to basically “rent” a car for a term of 36 to 48 months, which means that every couple of years you will have the option of driving a brand new vehicle. A lease is often easier to obtain than a bank loan for a car, and maintenance costs are low, since most new cars carry a three year warranty.

Cons

The biggest drawback to leased vehicles is the extra insurance expenses - insurance rates for leased cars are generally higher, and may require gap insurance, which will pay off the lease in the event that the car is totaled.

Mileage restrictions are another drawback to a leased car. Most leases restrict driving from anywhere to 12,000 to 15,000 a year. Going over the mileage requires you to pay extra, anywhere from 15 to 25 cents per mile, depending on your lease. If you plan on driving a lot, you can rack up some significant extra costs by going over your mileage.

When considering whether to buy or lease a car, take into account the amount of driving you will be doing as well as your finances. Both options have their own benefits, it is a matter of a lifestyle choice as well as a financial one.