Back to all

Lease or Buy?

September 25, 2020



Lease? Or buy? These are the options for Troy drivers. It's always a tough question for auto owners, but here is some info that'll help you make an informed decision.

If you buy, you'll pay the full cost of the vehicle, maybe an initial down payment, monthly payments on the balance that pays down the loan principal, and the finance charge.

Troy drivers who lease finance the portion of the cost of the vehicle that's used up during the term of the lease. You'll pay some money up front: fees, security deposit, first month's payment and maybe a capital reduction. The monthly payments include a depreciation cost and a finance charge. When the lease is up, you return the vehicle to your local Troy area dealership. 

So how do Troy drivers decide?

First, how much do you have for a down payment? A lease usually requires a smaller down payment.

How much monthly payment can you afford? Again, lease payments will be much lower for any given down payment.

A lease needs requires better credit, so that's a factor.

How long will you keep the vehicle? Troy drivers who keep their vehicles around for a while will pay less if they buy. But just two or three years? Then leasing is the way to go.

If your car might suffer a ding or two, like a work truck would, then buying's better. The auto leasing company will want their vehicle back at the lease end in tip top shape, and if repairs are needed, you'll pay.

How far do you drive in and around the Troy area? Important to consider because leases have a mileage limit; if you go over, you pay a hefty charge per mile/kilometer when the lease is up. So high mileage Michigan drivers should definitely buy.

Will the car be used in your business? Check with your accountant, but both financing options have different tax benefits, depending on your circumstances.

Over the short term, leasing is much cheaper. Medium term, leasing and buying costs are about the same. Over the long haul, leasing always costs more.

Leases may sound a bit complicated, and the typical lease decision weighs more on the monthly payment rather than price. So sometimes Troy leasers may pay on a higher purchase price than a buyer would.

Here is a tip: If the salesman asks if you'll be leasing or buying, say you're not sure yet. Make your best deal, then look at your financing options.

Here's another: With a buy or a lease, if you total the vehicle, you'll owe the full amount of the loan, or the balance of the lease payments. Usually, it's less than the vehicle's fair market value, and that's all your Michigan auto insurance company will pay. But ask your Troy agent about gap insurance, which pays the difference between fair market value and what you owe. Big consideration for a lease.

Remember, you have to return your leased vehicle in excellent condition and may need to do all the vehicle manufacturer's recommended service and maintenance or face penalties. So see your local advisor at your Troy auto repair shop  or Auto Lab Troy on a regular basis, get the required work done and save the service records. It's well worth it.

Auto Lab Troy
2790 West Maple Rd.
Troy, Michigan 48084
(248) 643-7690

Need Service?

Request a Quote

More articles from Auto Lab Troy

A Bumpy Ride (Strut Assembly Replacement)

February 25, 2024

If youve noticed your vehicles ride has lately been bumpy or youre hearing strange noises when you drive over bumps, you may need new struts. The strut assembly is part of your vehicles suspension system thats used to absorb the irregularities on the surfaces you drive on. You have probably hea... More

Losing Your Cool (Why is My Air Conditioning System Not Working?)

February 18, 2024

When you turn on the air conditioning in your vehicle, you expect cool air to come out of the vents. You depend on it, especially in hot weather, but it can also be important in humid weather when you need it to help defrost your windows and windshield. The air conditioning system has a lot of p... More

Catalytic Converter Replacement

February 11, 2024

Many of us have become aware of how important it is to keep our planets air clean, and your vehicle has a key component that helps do just that: the catalytic converter. Its in the exhaust system, and its job is to superheat unburned, harmful byproducts in the exhaust, so they dont get spewed ou... More