Leasing vs. Financing a Car: What’s the Difference?

Handing car keys to customer

If you’re in the market for a new vehicle for your daily Muncie commute, you might be considering whether you should buy or lease a car. There are many benefits to buying and leasing a vehicle, but the best option for you will depend on your finances, what you need from a car, and what you want in your new vehicle. Learn about the benefits of leasing vs. buying a car with Toyota of Muncie, so you can better determine which option is best for your finances. If you have any questions about whether you should buy or lease, you can also contact our finance center.

Benefits of Leasing a Car

When you lease a vehicle, you are essentially renting it from the dealership for a pre-determined length of time. This is done with a minimal down payment and smaller monthly payments depending on the vehicle. A common lease term is generally about two years, at the end of which you can lease a new vehicle or buy the one you already have. Here are some benefits to leasing a car:

  • Lower Payments: Monthly payments and your down payment may be smaller than if you decide to buy a car. This will, however, depend on the vehicle and your lease terms.
  • Less Sales Tax: Leasing a vehicle will lower the sales tax in most states. You may only need to pay tax on your downpayment and your monthly payments in some areas.
  • Trade-Ins: Trading in your vehicle is very simple when you have a lease agreement. Simply pay off any remaining fees, sign a new lease, and drive away in your next vehicle of choice.
  • Great Coverage: When you lease a vehicle, it usually has excellent warranty coverage that covers everything from maintenance to minor repairs as long as you’re within your lease limits.
  • Options: Leasing a vehicle is a great way to stay up to date on the latest technology and performance features on the newest Toyota vehicles. If you enjoy always having the latest technology, then leasing is likely a good choice for you.

Benefits of Buying a Car

When you buy a vehicle from Toyota of Muncie, you make payments on your loan until you own the vehicle in full. Also known as financing, buying a vehicle is a great way to save money long-term and use a vehicle to its fullest potential. Learn more about the benefits of buying a car:

  • No Mileage Restrictions: When you finance a vehicle, you’re not limited by lease restrictions or mileage restrictions. If you drive around or outside of Pendleton quite a bit, then you may want to consider buying over leasing.
  • Total Ownership: After you pay off your loans, the vehicle is yours entirely! This means you can modify, decorate, or change the vehicle as you please.
  • Customization: If you wanted to add accessories or custom parts to your vehicle, then buying is the way to go. When you finance a car, you can make cosmetic changes without restriction.
  • Ability to Sell: You have the ability to sell your vehicle to a friend, family member, or someone else should you choose to do so.
  • Financing Options: While neither process is particularly difficult when you shop at Toyota of Muncie, when you finance a vehicle, the process is more straightforward and more accessible to Albany drivers who may not have a good credit score. When you buy, you also have the option to refinance your loan later on to lower your monthly payments and interest rates.
  • Less Cost Over Time: While buying a new car is more expensive upfront, you’ll save more over time compared to leasing. After you’ve paid off your loan, the cost of owning a car lowers dramatically, leaving more money in your pocket.

Explore Car Leasing and Financing Options at Toyota of Muncie

Whether you choose to buy or lease your next vehicle, the Toyota of Muncie finance team is here to help you. We can answer any specific questions you have about leasing vs. buying, and we can also help you plan your budget with our online payment calculator. Make sure to explore our new vehicle specials, as well as our offers and incentives, to find the best deal for you!

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