Buying vs. Leasing
Leasing and Financing Benefits
Honda Financial Services understands your needs. Choosing between leasing and financing is as important as choosing the right model. Below are some benefits of both leasing and financing through Diamond Honda and Honda Financial Services. The following should help you decide how to purchase a new Honda.
In a lease, you do not purchase the automobile. "You contract to use it for the first, and best, period of its life." Then, at the end of the term you still have the right to purchase the vehicle. Following are some additional benefits to leasing a Honda:
Risk Avoidance - With a lease, the bank assumes the risk for events that change market value or trade in values. (For example: rising fuel costs, accidents, safety recalls, depreciation, wear and tear, etc.) On a purchase, the buyer assumes risk.
Less Cash Up Front - One of the biggest advantages of a lease is that it does not usually require a substantial down payment. In many states, you can even pay the sales taxes as part of your monthly lease payment, rather than in a lump sum.
Lower Monthly Payment - If the finance period is the same, your monthly payments will be lower when leasing (vs. financing) because your monthly payments are based on the vehicle's estimated depreciation. (You are contracting to use a portion of the car's value, rather than buying the entire car.)
A New Car More Often - Your taste and preference may change, and a short-term lease makes it easy to drive a new car more frequently. Additionally, you may have your needs for a larger or smaller car in a few years, and a lease makes it easy to plan for such changes.
Avoid Negative Equity - You don't have to worry about resale value. If your car depreciates more than the estimated residual value in your lease contract at full term, you can turn it in at the end of your lease term. But if it's worth more, you can buy it and keep it or resell it. A lease gives you an option.
High Mileage Drivers - In a lease: "The more miles you drive the more money you save!" Normally the term is 3 years, 36,000 miles. If you anticipate driving more miles you can prepay the miles at only $0.10 per mile. However with a purchase, high mileage depreciation is normally factored at a higher rate when the vehicle is brought back in for trade.
Less Sales Tax - Sales tax is based on the monthly payment and the monthly is based on the portion of the vehicle you use in a lease, but sales tax is based on the entire price with a purchase.
Lower Maintenance Cost - Regarding a lease, a manufacturer's warranty for Honda is a 3 year, 36,000 miles which is the standard lease term. With a purchase... since most valued clients finance for longer than 36 months, their financial exposure for possible repairs is greater.
If you typically keep your vehicle for five to ten years, then financing may be your best option. Honda Financial Services may be your best choice in financing your new vehicle, with competitive rates and terms designated to meet your needs.
Pride of Ownership - Opon full payment of vehicle, you can enjoy the pride of being debt free.
Make Changes to Car's Appearance - You can alter the interior or exterior to suit your taste (though your choices may affect the resale value.)
Negative Equity - Purchase allows you to carry a certain amount of negative equity and spread it over a longer term.