If you're looking to invest in a new Chrysler, Dodge, Jeep or RAM vehicle but unsure of whether to buy or lease, Brandl Motors can guide you in the right direction! Our car finance experts have put together an outline of leasing a car or buying/financing one. Our Little Falls, MN car dealership is dedicated to helping customers find the vehicle they want, as well as helping figure out which option is right for them. Visit our finance center page or stop by our new car dealership at 14873 113th Street in Little Falls, MN to learn more! If you have questions before you stop by, call us at (877) 280-4374!
| Monthly Payments||Monthly lease payments are usually lower than the monthly finance payments because you are paying only for the vehicle's depreciation rather than the full purchase price during the lease term, plus interest. Alternatively, you can lease a more expensive vehicle for the same monthly payment as financing.||Monthly finance payments are usually higher than monthly leas payments because you are paying for the entire purchase price of the vehicle, plus interest and other finance charges, and taxes. For the same monthly payment as leasing, you must finance a less expensive vehicle.|
| Vehicle Return||You may return the vehicle at the lease end, pay any end-of-lease costs and "walk away."||You have to sell or trade the vehicle when you decide you want a different vehicle|
| Future Value||The lessor has the risk of the future market value of the vehicle. you generally have the opportunity to gain any vehicle equity.||You have the risk of the vehicle's market value when you trade or sell it. You would also have any vehicle equity.|
| Up-Front Costs||Up front costs of leasing a vehicle are usually less than up-front financing costs. They typically include the first month's payment, a refundable security deposit, registration fees and sometimes local taxes.||Up-front costs of buying a vehicle are typically greater than up-front leasing costs. They typically include the cash price or a down payment, sales taxes on the full price of the vehicle, registration fees and other government charges.|
| Total Costs||The total costs of leasing a vehicle for a fixed period are generally less than for financing because of lease savings on depreciation and gap coverage; reduced sales tax; and the time value of money.||The total costs of financing a vehicle for a fixed period are generally more than leasing because of higher costs of depreciation and gap liability, more sales tax and the time value of money differences.|
| Frequency of changing vehicles||Leasing has advantages if you change vehicles frequently. Trade in and warranty advantages, unexpected depreciation advantages and tax effects.||Buying has advantages if you do not change vehicles frequently. Cost advantages and tax effects.|
| Gap Coverage||Gap coverage is usually included in lease agreements, but if not, it may be purchased.||Gap coverage is usually not included in finance agreements, but it may be purchased.|
| Warranty Expiration||If you lease a new vehicle for a term of 36 months or less, all vehicle manufacturer warranties will cover the full lease term, subject to the warranty mileage restrictions.||If you finance a vehicle for a term of 48 months or more, most new vehicle manufacturer warranties will not cover the full finance term.|
| Achieving Full Ownership||You must exercise your purchase option at either early termination or end-of-term in order to become the owner of the leased vehicle. Until then, the title is in the lessor's name, although you may be listed as the driver or registered owner depending on the state.||When buying a vehicle with cash, you immediately become the vehicle owner. When purchasing a vehicle with an installment sales contract or loan, you pay down the loan balance and eventually build equity in the vehicle. You receive full ownership only after you make your final payment. Until then, the finance company has a lien on the vehicle title.|
|Mileage||Lease payments are based on a predetermined number of miles (often 12,000 or 15,000 miles per year). You can request a higher mileage limit and pay a higher monthly payment. You will likely have to pay charges for exceeding those limits, but only if you return the vehicle.||You may drive as many miles as you want, but higher miles will reduce the vehicle's trade-in value or resale value.|
|Reasons for mileage limits|
Vehicle leases include a mileage limit because the residual value is based on the expected mileage. Driving more miles reduces the value of the vehicle. Excess mileage charges are the way lessors recover the expected decrease in value from the additional use.
|Effect of more miles|
If you drive more miles than you expect, there is no excess mileage charged owed to the creditor, but the vehicle will be worth less when you trade or sell it.
| Moving Out of State||Some lease agreements restrict you from moving with the vehicle to another state and usually restrict you from moving to another country||Finance agreements generally do not restrict you from moving with the vehicle out of state but usually restrict you moving to another country.|
| Rate Disclosure||No Federal Rate Standard. In leasing, there is no federal requirement for lessors to disclose a lease rate. There is no mandatory federal formula for calculating a lease rate.||Reliable federal rate standard. In credit transactions, such as vehicle loans, federal law requires disclosure of the annual percentage rate.|
| End-of-term Disposition||At the end of the lease (typically 2 to 4 years), you usually have four options: (1) return the vehicle, (2) trade or sell the vehicle, (3) purchase the vehicle or (4) arrange for a third party to purchase it.||At the end of the finance term (typically 4 to 6 years), you have two options: (1) trade or sell the vehicle or (2) keep the vehicle|
| Excess Wear||Leases limit the amount of wear to the vehicle. You will likely have to pay extra for charges if you exceed those limits and return the vehicle.||There are no limits or charges for the excessive wear to the vehicle, but excessive wear will lower the vehicle's trade-in or resale value.|