Car Leasing vs. Buying in Denver

Is Leasing or Buying Right For You?

lease a car Denver CO

There are a few questions you should ask yourself before choosing between leasing or buying a new vehicle in Denver. Depending on your situation, each option has its benefits. For instance, if you normally drive more than 15,000 miles or more a year, buying would probably better suit your needs, whereas if you drive 12,000 miles or less each year, you may be better off leasing. We've compiled some helpful hints to assist you in your decision to lease or buy your next new vehicle.

Many car shoppers still maintain the goal of ownership, with the thought in mind of driving their vehicle for several years sans monthly payments. For many of the reasons shown below, however, the percentage of people who opt to lease is growing. Kelly Blue Book analysts explain that features offered in new cars these days are changing so rapidly that some car shoppers are reluctant to limit themselves to driving the same vehicle for the next six or more years. In fact, consumer leasing has risen by about 10% in this decade. We are now seeing almost one-third of new car shoppers opting to lease.

Benefits of Leasing

  • New Vehicle More Often
  • Lower Monthly Payments
  • Little-to-no Money Down
  • Flexible terms
  • Warranty coverage throughout lease term
  • Locked-in end-of-term value (potential asset)
  • Newest technology
  • Try before you buy
  • Multiple lease-end options

Benefits of Buying

  • Ownership at end of finance term
    -may have long period of use w/out monthly payments
  • No mileage restrictions
  • Lower insurance costs
  • Sell at any time
  • No outsider penalties for stains, dents, scratches
  • Accessorize or modify at will

Buying vs Leasing Considerations

Technology Innovations in Safety, Performance & Infotainment Features

Technological and engineering advances seem to be coming fast and furiously in cars these days (no pun intended). These swift advancements turn up as very attractive and desirable new features in the latest new models. Besides the lure of the latest infotainment and connectivity features, there is the practical and prudent aspect of safety advances like lane departure and blind-spot warnings, collision-avoidance automatic breaking, overall better handling and more. Fuel efficiency is also a big player, both for general environmental concerns and monetarily, considering the fickle nature of gasoline prices. The combination of advancements in safety, performance, efficiency and infotainment features is strong motivation for many Denver drivers to desire updating their ride every few years. Generally speaking, that’s an easier proposition when leasing, especially for those who find themselves looking at 60-month financing contracts.

Down Payment

Lease down payments are usually lower than those for financing. This may not be an issue if you’re trading in a vehicle that will cover your down payment. However, if you think you might like to keep your current vehicle as well, then little-to-no due at signing offers frequently available on new model leases may allow many Denver car shoppers the opportunity to afford an additional car, SUV or truck.

Monthly Payments

If you have a lot of room in your budget for a higher monthly payment, you may be able to finance for 36 months and own your vehicle in a relatively short time. However, for many of those shopping for cars and trucks in Denver, keeping a lid of their monthly payment is paramount. Since leasing does not finance the entire value of the new car (the amount is reduced by the residual value stated in the lease contract), monthly payments are often significantly lower than a purchase finance situation.

Ownership and Control

Americans like ownership and control. It’s true that you have certain restrictions when you lease a car in Denver; for instance, you’re limited to a set number of allowable annual miles (or charged fees for overages). Usually it’s 10,000-12,000 with contractual mileage extensions available. Thus, Colorado drivers who put 30,000 miles a year on a vehicle are better off purchasing.

Graph of Relationship between a financed car's value and balance on the loan - shows period of negative equity

Ownership is not necessarily an issue for lessees however, since one of the lease-end options available to them is to purchase their leased vehicle. Well cared for leased vehicles may be worth more than the contracted residual value, in which case a lessee may be able to turn a profit by purchasing their leased vehicle and selling it privately.

When you pay off your finance-purchased vehicle, you can keep it, sell it, or use it as a trade-in on a new model. Unfortunately, you don’t have a guaranteed residual value on your purchased vehicle, which means you’re at the mercy of market trends, even if your vehicle is in pristine condition.

If you decide to trade in your finance-purchased vehicle prior to the end of the finance term, you may take quite a hit from depreciation (see graph). For this reason, those who like to drive a new vehicle every two or three years, should seriously consider leasing.

Maintenance and Repair Costs

Whether you finance to own or lease your new vehicle, you’ll be required to have regular maintenance and oil changes performed to satisfy either your lease contract or to keep from negating your purchased vehicle’s warranty coverage. It’s during the later years of driving a vehicle that maintenance and repair costs start to add up, and anecdotally at least, about the time the warranty coverage ends. Car owners can purchase extended warranties or maintenance plans to help counteract the uptick in repair costs as their vehicle ages. This is not an issue for people who like to trade in their leased vehicle every three years for the latest model. A leased vehicle is covered by warranty throughout the lease term.

We're Here to Help

After considering all the pros and cons of leasing vs purchase financing your next new vehicle, if you're unsure as to which choice would best suit your lifestyle, please contact us to assist you in exploring every option and crunching the numbers. Our Finance and Leasing experts at Larry H. Miller Chrysler Dodge Jeep Ram are here to help you find the best lease or finance terms to help you drive home in the vehicle you really want. Use the contact form below, give us a call at, or just drop by our dealership in Denver and experience the Larry H. Miller commitment to customer service.

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