Yes, Virginia, you can lease a new Ford SUV or truck at Gary Crossley Ford in Liberty, Missouri, drive a nicer, more luxurious vehicle, with more options and more features, pay less money each and every month, and never ever have to worry about owing more than your vehicle is worth again.
It may sound too good to be true. Like there has to be a catch somewhere. There’s not, but it is important to understand exactly what you’re agreeing to when you sign a lease.
Is leasing a car or buying a car better?
Basically leasing a vehicle is the equivalent of renting a car as opposed to actually purchasing one. Instead of renting it by the day, you’re renting it by the month for however many months called for in the terms of the lease.
A monthly lease payment will typically be lower than a loan payment on the purchase of most vehicles because when you purchase a vehicle, you have to borrow enough, or come up with a cash down payment big enough to entire the full cost of the purchase up front. When you lease the vehicle, you’re paying as you go. Month by month. And you’re only paying for the miles and depreciation that happen to the vehicle during the lease.
And that’s where leasing a vehicle differs from renting a car or an apartment.
Is it a waste of money to lease a car?
A lot of financial gurus and talk show hosts will tell you that leasing a car or truck, just like renting a house, is the moral equivalent of pouring money down the drain. Burning hundred dollar bills by the fistful, but that’s not exactly accurate.
Let’s say you’re shopping for a $50,000 vehicle. If you buy that car or truck you’re going to have to come either up with $50 large or borrow it upfront. You’re going to pay interest on the full amount every month for as long as you own the vehicle.
When you lease a $50,000 vehicle for 3 years, you only have to cover the amount of value that the car is expected to depreciate over the course of that three years, probably $20 grand. The leasing company pays the full purchase price, owns the vehicle, and leases it out to you for the cost of the expected depreciation plus interest.
At the end of the lease, though, you have options.
“Here’s your advantage,” says Todd Gentry, General Sales Manager at Gary Crossley Ford.
“At the end of that lease, you can buy that car. That’s your car. If you would like to purchase it, it’s yours. You can buy the car then you could sell the car. Or you can trade the car in on something else. You can do whatever you want, or you can hand me the keys and you can say here, Todd. I want another one.”
At the end of the lease, you can purchase the vehicle for what is known as the residual value. That’s the amount the vehicle is expected to be worth at the end of the lease term.
Some shoppers are getting a pleasant surprise at the end of their leases these days.
Many leased vehicles are worth dramatically more than they were expected to be three years ago when their leases were signed.
What are the cons of leasing a car?
That all sound great. Everybody loves lower payments, but leasing a car is not the best option for everyone – not even for everyone who works here at the dealership
“I’ve never had one,” says Todd. “It’s just not for me. And some people might shoot me for saying that, but it’s not something I am really passionate about.”
If you’re a salesperson crisscrossing the state of Missouri every week visiting clients, you’re going to rack up too many miles for a lease to be economical for you. The overage charges will crush you at the end of the lease.
If you like to modify, soup-up, and personalize your vehicles to make them uniquely yours (cough, Todd), leasing is probably not your best bet because everything you do to your ride has to be undone at the end of the ride.
And If you like to hang on to your cars, and drive them until the wheels fall off, you’re probably going to be better off buying the car outright and upfront.
Lease work best for drivers who like to be in a new car every few years, keep their cars looking like they came directly off the showroom floor, and drive under 15,000 miles per year or so.
Come experience the Crossley Difference
Either way, the pros here at Gary Crossley Ford can help you figure out the best way for you to drive the car, truck, or SUV of your dreams, a monthly payment you can live that’s not a nightmare.