To Lease or Buy a Car: That is the question

You have been on the hunt for that perfect car; the one that’s the right size, perfect style, and exact color you have always wanted. And just when you were about to give up your search, finally! Jim Shorkey Family Auto Group has had your dream machine all along! You never thought you were going to find that perfect car, so you didn’t even think about how you were going to purchase it. Now you’re stuck at a crossroad: to buy or to lease?

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If you’re the type of person who likes change and wants a new car every 2 or 3 years, leasing would be perfect for you. If you’re the committed type and you like to own your car for years upon years, buying would be the best-suited choice for you. You have to weigh the advantages and disadvantages of each option and choose the one that best fits your preference and lifestyle.

Here is a helpful list of advantages and disadvantages of buying and leasing a car that will help make your decision a little easier!

Advantages of Leasing:

  • Low! Low! Low! – When leasing a car, you usually have a lower down payment, lower monthly payments, and lower repair costs. You can’t beat those savings!
  • Changing with the times! – Cars are constantly changing each year with enhancements in comfort, quality, and technology. With a lease, it is easy to drive away in a new car every 2 to 3 years.
  • Tax break! Can you believe you only have to pay sales tax on the portion of the car you finance?!
  • Hassle FreeYou don’t have to worry about all that trade-in hassle when your lease expires. You just simply bring your car back to the dealer and start shopping for a new one! Let’s face it, who doesn’t love car shopping?

Disadvantages of Leasing:

  • And I would walk 500 miles! – Well, you’re going to have to if you reach your set mile limit. When leasing a car, your mileage is typically set at 12,000 to 15,000 miles per year. All those savings you had when leasing your car will be used to pay for excess mileage at the lease termination.
  • Wear-and-tear! – It may have been cute at the time when your dog was covered in mud in the backseat of your car with his head out of the window and the wind in his ears. However, it’s not so cute when you are charged for those muddy paw prints and drool stains at lease termination.
  • E=Mcontract²? – Lease contracts can be confusing to understand! It is important to understand the contract before you sign it.

Advantages of Buying:

  • Look at the warranty on that thing! – New cars come with warranties, from bumper-to-bumper, to powertrain. When buying a new car, you usually leave the dealership with 10 or more warranties! (Find out about our EXCLUSIVE Warranty Forever!)
  • I can get the car for how much?! –Dealers may offer financing at a low interest rate, which can reduce the amount of interest you pay over the life of your car loan. The best part is, once you pay off the loan, the car is yours to keep! No more hassle of monthly payments! (Check out our payment estimator here!)
  • On the road again! – When you buy a car, you have the capability of putting as many miles as you want on it! So feel free to take the cross-country road trip you’ve always dreamed of. But before you go, don’t forget to schedule a service appointment for an oil change! You can do that here!
  • You don’t have to apologize for a modify! – Unlike a lease, you are the owner of the vehicle and you don’t have to turn it back into the dealership within 2 or 3 years. With a lease, you are unable to add any accessories or modifications to the car. When you buy a car, you are able to modify, glamorize, and accessorize to your liking. Just when you thought it couldn’t get any better!

Disadvantages of Buying

  • Oldsmobile – The one advantage with leasing is that you are able to keep up with the changes and get into a new car every 2 to 3 years. When buying a car, people tend to keep a purchased vehicle for a longer period of time to spread the cost over the years. Just like the latest trends, car looks become “outdated” and “old.”
  • Depreciation– You may appreciate the fact that you were able to buy the car with your hard earned cash, but after purchasing the vehicle it depreciates in value, making it harder to sell. (To help matters a bit, we are always looking for pre-owned vehicles! Call about scheduling for an appraisal!)
  • Get that piggy bank out of the closet! You’re going to be putting down a large deposit! – A higher down payment is usually required when buying a car.

Start finding your dream car here, and use this list to help decide which purchasing method is the best fit for you!

 

 

Finance Series, Part 3: What to expect from the finance department at Jim Shorkey

We received such great feedback from Parts 1 and 2 of our recent Finance Series that we created a bonus Part 3. This helpful, 1-minute video features Jed Reaggle, Finance Director at Jim Shorkey Chrysler Dodge Jeep Ram. Jed provides valuable information as he explains what to expect from the finance department when you purchase a car from Jim Shorkey!

Finance Series, Part 1: Credit score fact vs fiction

Quick—what’s your credit score? Surprisingly, a vast majority of people would not be able to answer this question. What these people also may not know is that this information can be freely obtained from one of the three major credit agencies—Equifax, Experian, and TransUnion—each calendar year. If you strategically space these reports out, then you can track your score every quarter or so.

Unfortunately, this data may not be too helpful if you don’t know fact from fiction when it comes to your credit score. Recently, Quizzle—a site dedicated to credit scores—published a list of the top credit score misconceptions, and there are some interesting myths on the list. Here are some facts you might not know—or wrongly know—about your credit:

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Settled debts do not get dropped from your credit report. Many people think late payments and bad debts get dropped promptly from their credit report once the problem is resolved. Unfortunately, this is not the case. These missed payments and debts linger for 7 years, and bankruptcies may stay on reports for 10 years.

Paying with cash does not help your credit score. This doesn’t factor into your credit at all; credit reports (and credit scores) care only about what you buy on credit; if you stop using your credit cards in favor of cash, then it doesn’t really factor into your equation at all. It’s more important to use credit responsibly than to stop using it entirely.

Closing credit cards does not improve your score. This is a close cousin of the myth about paying in cash, though it is a little more complicated. Closing out credit cards is unlikely to improve your credit rating; in fact, it can hurt. Agencies want to see a low credit utilization—that is, the ratio between the credit you’re using and the credit you have available. Ideally, you’re keeping that number under about 30%. As you can see, closing credit card accounts can drop your available credit without affecting your outstanding balance, and that can be bad.

Making credit inquiries won’t necessarily hurt your credit. Many people think that just looking at your credit will harm it, but that’s not always true. Soft inquiries, such as when you request your credit report for personal reasons, generally have no effect on your rating. Hard inquiries from banks, credit cards, and loan companies definitely do have a small but measurable impact on your score.

A high income will not improve your credit rating. Many young folks fresh out of school think that their credit score will go up as a natural consequence of getting better-paying jobs. That’s not the case; again, your credit rating is only a measure of how you manage your credit, so income is irrelevant to the equation (though it might help you pay down your credit).