Can Leasing Vehicles from Honda Dealers Be Better than Buying?

August 3rd, 2015 by

2015 Honda AccordHonda dealers understand that the decision between leasing and purchasing a new or pre-owned Honda depends on an individual’s needs. Both situations have their good and bad points, so the choice has more to do with a person’s lifestyle than which is actually better. Here are a few of the pros and cons of each type of financing:

Leasing Advantages

  • Little or no down payment
  • Honda dealers offer lower monthly payments to lessees than they do buyers
  • More car for the money since borrowers are only paying for the depreciation of the vehicle, along with interest charges, fees, and taxes
  • Warranties from Honda dealers typically last as long as the lease – usually 3 years
  • Returning the vehicle at the end of the lease will not affect the customer financially
  • Having a new car every 3 years means the lessee will always have the latest in safety and technological features

Leasing Disadvantages

  • No equity in the vehicle if the lessee later decides to purchase it
  • Early termination charges for breaking a lease early that rival completing the contract term
  • Mileage limits that vary from 9,000 to 15,000 per year and charges per mile for exceeding that limit
  • Fees for what is considered to be beyond normal wear and tear
  • Financing another car after the lease is up
  • Higher finance charges because lower payments are drawn out for a longer amount of time

Buying Advantages

  • Better if the buyer has kids that may damage or dirty the vehicle’s interior
  • Full ownership of the vehicle
  • Equity in the vehicle and the ability to trade or sell to pay off the loan balance
  • Full cash value of the vehicle when it is paid off
  • No further payments to the Honda dealers after the loan is paid in full
  • Customizing or modifying the vehicle in any way the customer chooses
  • Insurance generally costs less than on leased vehicles
  • If using the vehicle for purposes of a private business, it can be claimed as a tax deduction

Buying Disadvantages

  • Selling or trading the vehicle when the buyer wants to replace it
  • Determining the vehicle’s worth when you are ready to trade or sell it
  • If the car has less worth than the amount of the loan, the buyer will have negative equity and will have to pay the difference if selling or trading
  • Large down payments
  • Rapid depreciation affects the resale value
  • Mechanics’ bills incurred after years of use

When deciding whether leasing or buying a new or pre-owned Honda is the best option, there is no definitive answer. An individual’s budget, driving style, and the financing package that best suits him or her will all factor in the decision. That is why the best way to choose a financing option is to do in-depth research and weigh all the options before visiting local Honda dealers.

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