Leasing vs. Buying: Everything You Need To Know

Here at Volvo Cars Savannah, we know that financing is the most stressful part of the car buying experience for many drivers. Not only is there some fine print to pay attention to, discussing money and different payment options can be a lot for some. That is why our finance team is dedicated to helping you find the best payment option for your lifestyle while remaining friendly and helpful along the way.

One of the main questions we get pertains to the differences between leasing and buying. More specifically, many people will be wondering which is the best option for their wallet and their lifestyle. While there is not a single, one-size-fits-all answer for this question (it is dependent on your specific financial situation and your driving habits), we wanted to offer some clarity on the differences between these two options.

Leasing: No Loans Involved, but More Parameters

So let's say you don't want to buy a car, nor do you want to take out an auto loan. This is absolutely understandable! That is where leasing comes in.

Leasing can actually be a more affordable payment plan on a monthly basis due to the way paying for a car works (instead of a loan being split over a certain number of months, a lease is a predetermined figure that you will pay every month you lease the car). That means you don't have to deal with any loans when you lease. It's akin to the difference between buying a home and renting an apartment.

You also will have access to newer cars! When you buy a car, you have a specific model year for the years to come. However, when you start your lease you can choose a new model with the latest equipment. Then, after your lease expires, you can choose whether you want to lease that car again, buy it, or walk away. You could even lease a different car if you wanted to.

However, leasing comes with specific parameters that must be met, mainly when it comes to mileage. Furthermore, there are quality expectations when you bring your leased vehicle back to the dealership. While wear and tear is understandable, more extensive damages are not. That is why leasing is more suited to drivers who are short-term drivers (who don't want to buy a car, but need a means of transportation), to drivers who need a vehicle for their work, or for drivers who don't drive extensive distances often.

Buying: Getting a Loan

When you buy a car, you aren't buying it like you would buy a sandwich at a deli, or even something off Amazon. When you buy those things you have the money to do so and so it is taken out of your bank account. However, not many people have the money to pay for a vehicle out right -- that is tens of thousands of dollars. That is why taking a loan out in order to buy the car is standard practice.

Because you take out this loan to cover the initial cost of the vehicle, you then pay back that loan over the following months (for however long the life of the loan is). This amount breaks down monthly to cover the cost of the loan and the interest that is accrued.

However, while you pay down this loan you do "own" the car (though, officially, it isn't yours in its entirety until you've paid off the whole loan). That means you can drive it as much as you want; service and maintenance is also on you to complete, too.

Have Any Questions?

We know this is a confusing subject, but we hope this has helped clarify a few of the differences between these two payment options.

If you would like to learn more about our selection of vehicles, or if you have questions about leasing, we invite you to visit us at Volvo Cars Savannah in Savannah, GA. Our team is here to help you every step of the way so you can feel confident during the purchasing process.