Denver Truck Shopping: Lease vs Buy - Which is Best for You?

Car Leasing vs. Buying in Denver
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Is Leasing or Buying Right For You?

Thinking About Leasing

There are a few questions you should ask yourself before choosing between leasing or buying a new vehicle in Denver. Depending on your situation, each option has its benefits. For instance, if you normally drive more than 15,000 miles or more a year, buying would probably better suit your needs, whereas if you drive 12,000 miles or less each year, you may be better off leasing. We've compiled some helpful hints to assist you in your decision to lease or buy your next new vehicle.

Many car shoppers still maintain the goal of ownership, with the thought in mind of driving their vehicle for several years sans monthly payments. For many of the reasons shown below, however, the percentage of people who opt to lease is growing. Kelly Blue Book analysts explain that features offered in new cars these days are changing so rapidly that some car shoppers are reluctant to limit themselves to driving the same vehicle for the next six or more years. In fact, consumer leasing has risen by about 10% in this decade. We are now seeing almost one-third of new car shoppers opting to lease.

Benefits of Leasing

  • New Vehicle More Often
  • Lower Monthly Payments
  • Little-to-no Money Down
  • Flexible terms
  • Warranty coverage throughout lease term
  • Locked-in end-of-term value (potential asset)
  • Newest technology
  • Try before you buy
  • Multiple lease-end options

Benefits of Buying

  • Ownership at end of finance term
    -may have long period of use w/out monthly payments
  • No mileage restrictions
  • Lower insurance costs
  • Sell at any time
  • No outsider penalties for stains, dents, scratches
  • Accessorize or modify at will

Buying vs Leasing: Factors to Consider

Technology Advancements in Safety, Performance & Infotainment Features

Advances in technology and automotive engineering are coming more and more rapidly these days, offering up extremely desirable new features in the latest new truck models. More than infotainment and connectivity the purely practical aspects of safety advances such as blind-spot and lane-departure warnings, along with other collision-avoidance and collision protection systems. We continue to see added refinements in both performance and efficiency, so that the newer trucks can not only tow more, but they use less fuel in the process. With the combined advancements in performance, efficiency, safety and infotainment systems, upgrading to a new model every few years is very appealing to many Denver drivers. The case for leasing becomes stronger when you consider getting into a new vehicle every few years.

Down Payment

Leases offer lower down payments than financing. For those trading in a vehicle, that may not be a big issue. However, for people shopping for a 2nd vehicle, or for first-time buyers, new lease offers with little-to-nothing due at signing can be a real boon.

Monthly Payments

Some budgets may allow for higher monthly payments and with the ability to finance over shorter terms, buyers can become owners in a relatively short time and enjoy driving their vehicle wihtout monthly payments. However, for many Denver truck shoppers, keeping their monthly payments manageable is a high priority. Because leasing does not finance the entire value of the new vehicle (financing only the difference between the retail price and the residual value), monthly lease payments can be significantly lower than purchase finance payments. Thus, your monthly budget is a major consideration when deciding whether to lease or buy.

Ownership and Control

Ownership is a traditional goal for many consumers. While it’s true that there are certain restrictions associated with leasing, many lessees have no trouble staying within the mileage and usage parameters of their lease. Leases also offer a variety of end-of-term options, including purchase, so while you may start out leasing, you can still end up owning, should that be your desire. Leased vehicles can be traded in on a new lease or purchase, just as you would trade-in your purchased and paid-off vehicle. Purchasing becomes the better choice for those who know they'll be racking up a lot of mileage, or have a history of "hard use" with their vehicle. If you plan on off-roading in rough terrain, you'll probably want to purchase. If you're using your truck for the occasional find at the antique store, you may find that leasing works very well.

Graph of Relationship between a financed car's value and balance on the loan - shows period of negative equity

When you pay off your finance-purchased vehicle, you may decide to keep it, sell it, or use it as a trade-in on a new model. One advantage the end-of-lease purchase has (assuming you've taken good care of your leased truck), is a contracted residual value. With your purchased truck, condition aside, you are at the mercy of market trends, which could work either for or against you when it comes to trade-in valuation. Planning a year or two ahead is more difficult as you won't know what the market effect will be on your vehicle's trade-in value.

The decision to buy or lease should be based on your lifestyle. Financing and owning is great as long as it suits your wants and needs. Many people happily drive their truck for 60 (or more) months and own it outright at the end of that time. Some folks drive their same truck for 10 or more years. It only causes an issue for those who have a change of heart and would like a new vehicle mid-way through their financing term. They'll have to deal with negative equity when trading up to a new vehicle (see graph). If you know you're likely to want a new vehicle sooner rather than later, but can only afford financing long term, you owe it to yourself to consider leasing.

Maintenance and Repair Costs

Whether you purchase or lease your next new truck, you’ll find that regular maintenance and oil changes are required to satisfy either your lease contract or your buyer's warranty coverage. These are generally low-cost precedures. Maintenance and repair costs start to rise in the later years of a vehicle's use. A leased vehicle is covered by warranty throughout the lease term. For owners, there are ways to keep maintenance and repair costs down through extended warranty plans and reduced-cost pre-paid maintenance service agreements. See your dealership service advisor for information.

We're Here to Help

If after considering the varying benefits of leasing or buying a new truck, you're undecided as to which is the best choice for you, please contact us. We're here to help sort through all the finance & leasing options available to you. Our Finance and Leasing experts at Larry H. Miller Chrysler Dodge Jeep Ram Truck Center are here to assist in finding the best lease or finance terms that will put you in the driver's seat of the truck you really want. Contact us through the form below, call us at 888-668-6581, or visit our dealership in Federal Heights and experience the Larry H. Miller commitment to customer service.

Contact a Finance & Lease Specialist