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Archive for July, 2013

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A great deal of thought goes into purchasing a new car. While some might rely on a vehicle’s bold good looks or astounding amounts of power to justify its purchase, there are the select few who look at the acquisition of a vehicle under a more financial light. Shining in the financial spotlight are two options that will forever be competing with one another when it comes to automobiles: the lease vs. the purchase. At Chapman Mitsubishi, we feel that it is important to show our customers the options of both.

Leasing, rather than buying a vehicle, can be a good option for some. If you lease, your monthly payments will be smaller than if you finance a purchase. Vehicle leasing, however, requires some contractual obligations, so it isn’t right for everyone. Here are some pros and cons to both leasing and purchasing a new vehicle.

Pros of Buying a New Car

  • Eventual ownership, freeing you from the pain of payments.
  • After the vehicle is paid off, you’re free to sell it at any time.
  • You can drive at-will, never having to worry about mileage limits.
  • No worries over minor mishaps like spilled coffee stains on carpeting or a dog-chewed seat belt.
  • You’re free to modify and/or accessorize.
  • Insurance costs are generally lower than leased vehicles.

Cons of Buying a New Car

  • Monthly payments are higher than those of a leased vehicle.
  • Dealers require a hefty down payment.
  • Rapid depreciation, diminishing the vehicle’s resale value.
  • With extended use you can expect to incur repair bills.

Pros of Leasing a New Car

  • Substantially lower monthly payments.
  • Down payments, if at all, are small.
  • No up-front sales tax fees.
  • No depreciation concerns.
  • Even with a low credit rating some leasing companies will still be willing to work with you.
  • If you own a business and use the vehicle only for business purposes, you can claim it as a tax deduction.

Cons of Car Leasing

  • Higher insurance premiums.
  • You’ll always have car payments.
  • Penalties for exceeding allotted miles. This generally ranges between 15 to 25 cents per extra mile.
  • Wear and tear fees, creating heightened concern when traveling with pets or small children.

If you decide to lease, it is important to understand that rates are determined by the difference between the vehicle’s purchase price, and what it will be worth at the end of the lease agreement. You can find out about lease rates by visiting a Phoenix Mitsubishi dealer.  So to keep your payments in check look to lease a vehicle that holds its value. Otherwise you’ll pay more if you opt for a vehicle with a high depreciation rate.

Stop by Chapman Mitsubishi for the latest Mitsubishi lease specials.