If you are in the market for a new vehicle, you typically have two options: you can lease the car, or you can buy it. Leasing can be an attractive option for buyers wanting a lower monthly payment and who are interested in trying out higher end vehicles. There are some special considerations when it comes to leasing, however. Keep the following in mind before you choose this option.
Mileage Limitations and Upkeep
Because you will likely be returning your leased vehicle at the end of the term (usually 3 years), you will be expected to keep it in fairly pristine condition. Any nicks, dents, or interior stains will be your responsibility before you trade it in. You will also likely have mileage limitations. In many cases, you will be billed for anything beyond 10,000 miles within the three year period.
If you have a long commute, or you have small children and pets that will be riding in the vehicle, leasing may not be the best option.
Early Termination Penalties
Not all finance companies permit you to terminate a car lease early. If they do, you will be responsible for finding someone to take over the lease for you, and you may be subject to an early termination penalty.
Upon returning your vehicle, you will also need to pay a flat fee of somewhere between $350 and $500.
Higher Long Term Expense
Although leased vehicles may come with a lower monthly payment, they often wind up being more expensive in the long run. Serial leasing means you will have a monthly payment for the foreseeable future, since your payments are not going toward ownership.
If you ultimately decide to buy the car you have leased, you will need to come up with a down payment and negotiate a new monthly rate on a car that will have depreciated significantly. If you had bought the car outright, you would have the option to sell it for a profit or be well on your way to paying it off and having no monthly payments at all.
That being said, used and new car prices have skyrocketed due to shortages related to the Pandemic in the past few years. Buyers are opting for longer term payment periods (84 months, in some cases). Longer repayment terms lower the monthly cost but ultimately mean you will pay a good deal more in interest. Because of this, many buyers are finding they wind up owing more than the vehicle is actually worth in the end.
If you are considering a longer repayment period in order to afford monthly payments on your vehicle, you might consider leasing instead to avoid accrued interest that offsets the overall value of the car.
Mercedes Benz Leasing Options
At Mercedes Benz of Littleton, many of our clients opt to lease their vehicles out of convenience and the ability to try something new in a few years. Mercedes Benz is constantly innovating to bring new tech and comfort to its vehicles, so you can expect incredible changes within a leasing term. If you have questions about leasing versus buying a Mercedes Benz, contact our dealership. We are more than happy to discuss financing options and any other questions you may have.
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