The decision whether to buy or lease your vehicle usually depends on your personal preferences and the specifics of your financial situation. Using traditional financing to purchase your vehicle will cause your monthly payments to be based on the entire value of the vehicle. It also means you will own the vehicle at the end of your financing term.

If you plan to keep your vehicle for more than just a few years, or if you drive well over 15,000 miles per year, or intend to make any customizations to your vehicle, traditional financing is probably best for your needs.

When leasing, you pay only for the portion of a vehicle you expect to use during your specified lease term. For example, if you lease a $20,000 vehicle, and that vehicle’s estimated worth at the end of your lease is about $9,000 (residual value), your resulting monthly payments will be based on the $11,000 difference.

Leasing offers you the following advantages:

• A lower monthly payment

• Little to no down payment

• More vehicle for the money

• No resale or trade-in - simply return the vehicle to your dealer at lease-end

• Short lease terms enable you to repeatedly lease new vehicles

• Potential tax advantages - i.e. lease vehicles used for business can provide tax deductions

Traditional Financing

Traditional Financing is an installment sale transaction between you and your dealer whereby you agree to pay the amount financed, plus an agreed upon finance charge, over a specific period of time.

Traditional financing is probably right for you if:

• You plan on driving your car for more than a few years

• You plan on driving over 15,000 miles a year

• You plan to alter your car’s appearance.

• You are attracted to the idea of owning a vehicle.