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Leasing vs. Buying: Which is Better?

car salesman giving new car key
 

When it comes to buying or leasing a car, the options can be confusing. We’re here to help you make an informed decision, which is why we’ve created a helpful guide on buying vs. leasing. Learn more about both options, and don’t hesitate to contact our finance team with any questions you have in the meantime about Toyota finance options, Toyota lease deals, and more.


Who Owns it?

  • LEASING: You do not own the vehicle. You’re paying for the use of the vehicle – the financial institution that you leased it through owns it. This is usually why you pay less per month to lease, than if you were to buy.

  • BUYING: Whether you pay cash or finance, the vehicle is yours. If you’re financing, you will have to meet the financial obligations of the lender. If you do not, they have the right to repossess.

In some cases, it may be possible for you to lease to own. This is an especially good option that favors a lease vs. buying for drivers with poor credit. Learn more about this option with us at Jordan Toyota.

What Are the Up-Front Costs with a Lease vs. Buying?

  • LEASING: Leases do not often require any type of down payment, however, many require a first month’s payment, security deposit, and other fees. As with a purchase, the more money you put down upfront, the lower the monthly payment will be.

  • BUYING: If you plan on financing the vehicle, the bank will most likely request a down payment. This is usually based on requirements by the lender and credit score. You also have the option to use the value of your trade-in as a down payment option. If you’d like to see what your vehicle may be valued at currently, click here.

What Are the Future Values?

  • LEASING: With leases, you will have mileage limits and wear and tear guidelines. If exceeded, this could cost extra money when the lease is turned back in. In some cases, the value of the leased vehicle is worth more than what the manufacturer had thought in your contractual agreement. In this case, you would be able to put that equity towards another leased unit.

  • BUYING: When you purchase a vehicle, it will be worth whatever the market deems at that time. Many factors go into the value of a vehicle, including how well it was maintained, state of the economy, mileage, and more.

What Happens When My Payments End?

  • LEASING: When you are finished making payments on a leased vehicle, you have different options. You may purchase the vehicle after the lease is due, lease a new unit, or walk away. Ask your Account Executive for details and suggestions on what may be best for your budget.

  • BUYING: When you’ve paid the entire amount of the contract, you own the vehicle. The lending institution will send you a lien release indicating that you’ve paid off the vehicle in its entirety.

FAQs

What sort of credit score is required to lease?

Our leases are calculated based on a Tier 1+ credit rating. If you aren’t sure whether you qualify for such a rating, you’re welcome to complete our online application here. If you believe you have a credit score different than a Tier 1+, don’t worry! Let us know, and we’ll be happy to work with you on calculating a lease based on your credit situation.

What are the fees associated with the lease but not included in the advertised payments?

Our worksheets will show you everything, including all taxes and fees. To see an example of our payment worksheet click here.

What is due at signing?

The first payment including tax, money down (if any), tax on the money down, tax on the rebate, (tire tax for Toyota, $1.25), title fee ($15), and tire tax ($1.25 for Ford).

How much tax is added to the lease?

The tax is figured on the monthly payment at 7% in Indiana and 6% in Michigan. For example, a $200 base payment has a total payment of $214 in Indiana and $212 in Michigan.

Some of your advertised leases are for a 36-month term. What if I want a shorter or longer-term lease?

It is possible to change the lease to meet your needs. Ask your Account Executive who can help you determine what sort of lease would fit your lifestyle and preferred payment best.

Calculate Your Future Car Payment

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Disclaimer:

Although every reasonable effort has been made to ensure the accuracy of the information contained on this site, absolute accuracy cannot be guaranteed. This site, and all information and materials appearing on it, are presented to the user “as is” without warranty of any kind, either express or implied. All vehicles are subject to prior sale. Price does not include applicable tax, title, license, processing and/or $199 documentation fee, and destination charges. ‡Vehicles shown at different locations are not currently in our inventory (Not in Stock) but can be made available to you at our location within a reasonable date from the time of your request, not to exceed one week.Pre-owned vehicle pricing includes all offers and incentives. Tax, Title and Tags not included in vehicle prices shown and must be paid by the purchaser. While great effort is made to ensure the accuracy of the information on this site, errors do occur so please verify information with a customer service rep. This is easily done by calling us at 844-885-3161 or by visiting us at the dealership.


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920 East Jefferson Blvd. • Mishawaka, IN 46545

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Jordan Toyota

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Phone: (574) 259-1981

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920 East Jefferson Blvd. Mishawaka, IN

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920 East Jefferson Blvd. Mishawaka, IN

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Jordan Toyota
Jordan Toyota
920 East Jefferson Blvd.
Mishawaka, IN, 46545 United States
(574) 259-1981
https://di-uploads-development.s3.amazonaws.com/jordantoyota/uploads/2017/08/JordanToyotaOGImage.jpg
Jordan Toyota 41.6725228, -86.1734768.