When looking to buy your next SUV, you have a number of important decisions to make. What make and what model should I buy? Should it be used or new? What options and features do I need?
However, the biggest question when it comes to affording that new SUV is whether or not you should buy or lease. Answering this question could be the difference between staying on budget and overspending thousands of dollars. Here’s what to consider.
Comparing Upfront Costs Between Leasing And Buying
When leasing a vehicle, the upfront out of pocket cost is significantly lower as compared to buying and financing. Leasing typically requires no or very little down payment and there are typically no upfront sales tax payments. The down payment for buying a new car will vary with your credit, but is usually higher than leasing.
If you are looking to get into a new SUV and you don’t have, or don’t want to, put down a lot of money up front, leasing may be the better option.
Want A New SUV Every Few Years?
If you like to have the newest vehicles or just get tired of driving the same thing, leasing is a great way to hop into the latest model. After a lease is over, you can start a new one on the current year’s model and all of a sudden you have a new ride. You don’t have to worry about selling or trading in the old model or having to deal with financing again.
How Many KMS Will You Put On Your SUV?
How much you plan on driving will affect whether leasing or buying is the best option. Leases typically come with a kms limit, after which you pay per km placed on the car. If you have a long commute, take long trips, or just like to drive a lot, you will have to estimate your kms over the life of the lease.
Of course, buying an SUV has no kms restrictions at all. Drive as much or as little as you want without worrying about overage fees. Those types of fees are bad enough on a smart phone.
Do You Want To Make A Monthly Payment For The Life Of The Vehicle?
The big difference between a lease and owning outright is the monthly payment. While leases are typically less expensive per month, when you buy you will eventually pay off the loan completely and have no monthly payment whatsoever. While going from lease to lease, those monthly payments will never stop.
The big payoff for owning rather than leasing is a big savings on your monthly cash flow. Plus, since you own the vehicle out right, you are free to customise it if you wish. Add a new stereo system, aftermarket parts, a body kit, or anything else that strikes your fancy.
Either way you decide to go, leasing and owning are good options depending on your overall situation. Take a look at what you can afford upfront, what you can afford per month, and how you will drive. The answer will then be clear.