Leasing vs. Buying a New Vehicle: Which method is right for you?

After you've decided on the ideal Chrysler, Dodge, Jeep, or Ram vehicle for daily drives in Livingston or Bozeman, your next step is to determine how you want to pay for it. Besides paying the full price upfront, your two options are financing or leasing. But which one is best for your needs and budget? To help you with your decision, here's a quick overview of the differences and benefits of each.

The first thing to know is that the main distinction between choosing a lease or a loan is vehicle ownership. When you take out a car loan, you own the vehicle and will eventually receive the title after the final payment. And with a lease, you are paying to use the vehicle for a predetermined number of months and will have a few options at the end of the contract.

Leasing

There are several attributes to leasing that may make it the preferable option for many Gallatin drivers. For example, leasing generally costs less than financing over the same time period. Not only are monthly payments typically lower than loan installments, but since tax is levied on only the monthly payments, not the vehicle's full cost, you'll save money that way too. Additionally, a lease's shorter-term length means you're not stuck with a long-term commitment. This allows you to upgrade to the newest model year sooner and enjoy the latest automotive tech and features more often.

Another benefit of leasing is residual value--what the dealer estimates the vehicle will be worth at the end of the lease. Contract terms stipulate that lessees aren't responsible for unexpected depreciation beyond the residual value. And thanks to a buyout option, if the vehicle's resale at the end of the lease exceeds the residual value, you'll have the opportunity to purchase the leased vehicle for what is essentially a discount.

There are a few restrictions to leasing that are important to keep in mind, like yearly mileage limits and a prohibition against modifications to protect the vehicle's resale value. Furthermore, while all leases are covered under warranty, the lessee is responsible for excess damage beyond "normal wear and tear." However, you'll have the option to select additional coverage at lease signing to mitigate any unforeseen costs. At the end of the lease, you can upgrade to a new model, purchase the leased vehicle, or turn it in and walk away (incurs a $350 disposition fee).

Finance

With financing, the monthly payments are generally a little higher, and you have to pay tax on the vehicle's full cost. However, since you're paying down the balance, you will eventually own the title after the final payment. Additionally, there are no mileage limits or modification restrictions, and you can sell the vehicle whenever you want. Furthermore, making regular on-time loan payments is a great way to improve or help rebuild your credit score.

Find Chrysler Dodge Jeep Ram Loan and Lease Options in Livingston, MT

Reach out to Yellowstone Country Motor today for more information about the latest Chrysler Dodge Jeep Ram models and available financing and leasing opportunities. And if you'd like to try one of our vehicles out for yourself. We welcome you to visit us here in Livingston for a test drive. It will be our pleasure to assist you.