Leasing vs. Financing When Buying From Castle Autoplex McHenry

December 1st, 2022 by

Leasing vs. Financing—Which is Right for You?

Undoubtedly, this topic has crossed your mind, and it can be daunting knowing whether leasing or financing a car is the right choice for you. That’s why we’ve put all the information you need to make that decision here.
Please, continue reading to learn more about the differences between leasing and financing a vehicle and which is the best route for you.

Leasing a new vehicle has become increasingly popular over the years, partly because of a new Illinois sales tax law. Thanks to this new law, leasing a car has become more affordable because, under the new law, vehicle leases that run longer than one year will see a tax applied to each monthly payment. In turn, this results in consumers paying less in taxes. Moreover, leasing a vehicle can be less expensive and allows you to drive a brand-new car every few years. Plus, since you don’t own the vehicle, there are no market value losses or trade-in hassles to deal with at the end of your contract agreement.

Advantages:

  • Lower monthly payment
  • Lower taxes
  • Little to no car repair or maintenance costs (depending on your lease agreement)

Disadvantages:

  • Long-term costs—You’ll always have a monthly payment and never own a car.
  • Mileage—If you drive more than your agreement covers, you will need to pay for the extra miles at the end of your lease.

Leasing is perfect for almost any lifestyle, but let’s look at the advantages and disadvantages of financing a vehicle to see how they compare.

Financing a Vehicle from Castle Autoplex McHenry

When financing a car, most of the time, you’ll have a monthly payment higher than leasing; however, once you pay off your car loan, you own the vehicle; it’s yours. You’ll enjoy the freedom of no longer being bound to a monthly payment, and you can modify or upgrade the car to your heart’s content and drive as many miles as you wish. Once paid off, you also do not accrue excess fees based on mileage or wear and tear.

Advantages:

  • Long-term costs—Once you’re loan agreement ends, you’ll no longer have monthly payments.
  • Mileage—You can drive as many miles as you wish.
  • Trade it in when you want

Disadvantages:

  • Higher monthly payment
  • Total costs—Typically, financing a vehicle is more expensive because of higher costs of gap liability, maintenance, additional sales tax, licensing, and depreciation. 

So, while the long-term costs are less than leasing, the upfront costs of financing are usually more expensive because when you take out a car loan, you pay the entire retail price of the vehicle. 

Lease or Finance from Castle Autoplex McHenry

When it comes to brass tacks, the decision to lease or finance entails deciding what’s more important to you—driving a brand-new car every few years while paying less upfront or owning a car and paying less long-term. Either way, our team of knowledgeable financing professionals is happy to help you learn more and answer any additional questions you may have. So, please express your interest in leasing or financing a new vehicle by contacting and visiting us in person at Castle Autoplex McHenry today!

Source: www.castleautoplexmchenry.com

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