Having access to a reliable vehicle is much less of a luxury these days and more of a necessity in everyday living. When it comes time to find a dependable car to get you from Point A to Point B, deciding between financing and leasing is a common debate. On the one hand, buying involves higher monthly costs, but you own an asset—your vehicle—in the end. On the other hand, a lease can have much lower monthly payments and less repair costs as they are usually under warranty. Being in the car business for over 70 years, at Cavender Auto Group, we’ve seen countless customers weigh these pros and cons. And yet, lately, here in San Antonio, more and more residents are opting to lease their next vehicles over a fixed term rather than financing expensive auto loans at high interest rates. Let’s explore why.
According to recent data, over one-fifth of new vehicles in the United States were leased in 2023, with the rest being sold outright. It's easy to understand why. When you choose to lease a vehicle, you simply get more for less. Leasing a car is the best way to keep your monthly payments low while getting behind the wheel of something new. With leasing, you have much more flexibility. You don’t have to commit to long-term ownership and worry about trying to sell your vehicle should your personal situation change. You can get short leasing terms, extend your term, or even trade the car in early. If you’d like to buy out your lease and own the vehicle, all you have to do is pay the residual value of the vehicle and the outstanding balance on the lease. Leasing allows you to drive a new car more frequently, typically every 2-4 years. So you can always ride in a vehicle that’s up-to-date without the high price tag. Not to mention, one of the best parts about leasing is that there are few (if any) maintenance costs associated with driving the vehicle. Everything is taken care of and included at the dealership, and as we said earlier, new vehicles are covered under warranty.
Depending on the market conditions, certain car owners might find themselves in a scenario of negative equity on their car loans, where the present value of their vehicle falls below the amount owed on their loan. While this isn't an optimal situation and often occurs due to various uncontrollable factors, it can significantly impact one's finances, credit score, and overall well-being. A common approach to alleviate negative equity involves trading in the existing vehicle for a leased one. This not only resolves the deficit in the investment but also contributes to credit rebuilding through manageable monthly payments. It's yet another reason why an increasing number of drivers are placing their confidence in the stability and adaptability offered by vehicle leases rather than opting to finance.
Ultimately, the decision between leasing and financing depends on your priorities, budget, and how you plan to use the vehicle. If you prefer lower monthly payments, more contractual flexibility, and driving a new car every few years, leasing might be a suitable option for you.
Here at Cavender Auto Group, we believe in empowering our customers to make the most informed –and confident – decisions as they embark on their car-buying journey. Get started by browsing our inventory of new vehicles from Ford, Buick, Cadillac, Land Rover, Jaguar, GMC, Chevrolet, and Nissan vehicles for sale in the San Antonio area today!