To buy or to lease your new 2014 Toyota Camry, that is the question. You know you are going with the Camry, but you just aren’t sure how you want to pay for it. What is worse, the differences in purchasing and leasing options can get confusing. The fact is that there are costs and benefits to any option you choose when considering the financing of a new vehicle. With that in mind, let’s start from the beginning.
THE SHORT OF IT
Part of your decision regarding how to finance your 2014 Toyota Camry will be about monthly payments. If you purchase your vehicle outright with no financing there will be no monthly payments. If you take out a loan to purchase a vehicle, the monthly payments on the loan will be higher than a lease payment would be on the same vehicle. The reason why this is so is because with a loan you are paying off the full purchase price of the car whereas with a lease you are only paying off the amount of depreciation that the car will accumulate over the course of the lease term.
For a simple example, if a car costs $20,000 and you took out a loan to purchase it you would be paying off $20,000. However, if you lease the same car for three years the leasing company might estimate that after three years the car will still be worth $12,000. Since you will be returning the car to them after the three year term they will still have $12,000 worth of a car to work with. They will therefore only have you make payments on the depreciation value, or $8,000. The payments will obviously be less on $8,000 then on the $20,000 you will be paying off on the loan.
THE LONG OF IT
Although it is clear that you will pay less in the short term for a lease over the course of months, in the long term things are quite the opposite. In the long term, if you were to buy your 2014 Toyota Camry outright without financing you would pay the least of any of the options. This is because you have no interest or finance charges to deal with. Further, the cost of the vehicle will eventually be offset when you resell or trade in the vehicle.
If you do have to finance, you will likely pay more to lease a vehicle than to take out a loan to purchase it in the long run. The main reason why this is the case is that when you lease a car you are basically renting it for the lease term. Then when the lease expires you can trade it for a new car with a new lease term, or you can pay the now depreciated purchase price to keep it. When you take out a loan on a car, after you pay off the loan you own the car. You could then turn around and sell the car, thus recouping part of the cost of the loan. When you purchase you gain equity, when you lease you do not. Finally you must consider that if you keep leasing new cars every three years or so you have to keep paying finance fees and interest. However, there are tax benefits with a lease that are not present with a loan.
In the end, the real consideration you must make when deciding whether to purchase or lease your 2014 Toyota Camry is how you like to live. When you purchase you likely save money. You can do whatever you want to your car because it is your car. You can drive as many miles you want and worry less about the interior. You can alter the car.
When you lease a car you spend more money over time but pay less each month. You get a new car every 3 years with all the new technology advancements. However, you will likely have mileage limitations, and you cannot just go ahead and do whatever you want with the car. You must keep it well maintained in order to retain the value for the dealer when you return the car at the lease’s expiration.
The decision is therefore a lifestyle choice. You must decide what is more important to you. When you do that, you will have a much easier time on deciding whether to buy or lease your 2014 Toyota Camry. To learn more details about buying and leasing come to Toyota of Killeen where we can help you decide the best option for you.
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