Leasing vs Buying a New Chevy

Price for Chevy Lease

Leasing is all the rage in the United States, with more car shoppers shying away from the traditional automotive loan, and leaning towards more flexible, short-term lease agreements than they have in the past. It can be confusing to know which one is right for you, especially if you have never leased a new car. With plenty of myths circulating, and more people willing to give you their strong opinion for one over the other, choosing which one is right for your particular situation can be mind-boggling. Rather than stress out and potentially miss one of the great Chevy lease deals going on, we put together two scenarios for acquiring a new Chevy model to help you figure out which one is right for you.

The All-New 2017 Cruze Hatchback

The Chevy Cruze has been around for quite a while, but 2017 brought a whole new version of the popular sedan to the world in the form of a sport hatchback. The 2017 Cruze Hatchback is the perfect car for a variety of different people. With enough interior space to keep your passengers comfortable and plenty of cargo space, thanks to the hatchback body style, the Cruze Hatchback has everything going on. On top of the sporty exterior appearance and the practical interior space, the 2017 Cruze Hatchback manages to deliver 38 miles per gallon on the highway, and 32 in the city.

Because this model is one of my current favorites, it will be the example for our little experiment. Take a look at everything you need to know for the upcoming scenario to help you decide whether to buy or lease your next vehicle.

Price: The 2017 Cruze Hatch LT comes with an automatic transmission, and features a starting MSRP of $21,920. A pretty economical price for such an awesome car – right?!

Assumptions: For the purpose of this particular scenario, let’s assume that the manufacturer’s MSRP is not what you end up paying for your new 2017 Cruze Hatch LT. After going back and forth at the dealership, you agree on a reasonable price of $19,997. Let’s look further into how much money you will be putting down, and how your loan or lease structure would look in this hypothetical situation:

  • Financing: After being approved for a loan at the Chevy dealership, you are given a 60-month loan term at an interest rate of 4.9-percent. You didn’t own your previous vehicle, so you have no car to trade-in, but you are able to put down $4,000 on the day you sign. Also assume that when the time comes to go ahead and trade-in your vehicle, it is in very good condition with an average of 12,000 miles on the odometer per year.
  • Leasing: When you lease your 2017 Cruze Hatch LT, you don’t have a car to trade-in, and are only able to put down $2,000 for a down payment. Your lease agreement is for 36 months, and you are allotted 12,000 miles per year. Throughout the duration of your lease, you end up keeping the vehicle is excellent condition with no excessive wear and tear.

Monthly Payments: While each hypothetical car shopper took home the exact make and model for the exact same price, the actual monthly payments required are much different. Let’s take a look at just how different they would end up being:

  • Financing: Keeping all of the above assumptions in mind, the car shopper who ends up taking out a traditional automotive loan would be responsible for monthly payments of $301. While this amount isn’t too extreme, it is still a decent chunk of change for the average single American’s income of $34,970, according to the IRS Statistics of Income report.
  • Leasing: Also keeping all of the hypotheticals from above in mind, the person who ends up signing a three-year lease agreement will end up with a monthly payment of $196.94.

What Does it All Mean?

The monthly payment of the leased Cruze Hatch LT represents a major difference compared to what the driver would pay for financing the exact same car. This stark contrast is the very reason why so many drivers are gravitating towards car leasing, and away from traditional auto loans. As awesome as it looks to lease your car, there are a few points to keep in mind before you dive into uncharted territory.

  • A Lease Won’t Allow You To…
    • …Use your vehicle as a trade-in toward a future down payment. You don’t own the car you lease, so you can’t expect to sell it at the end of your lease term.
    • …Put excessive mileage on your car. If you enjoy longer road trips and joy rides out on the open country roads, leasing may not be your best bet.
    • …Modify your vehicle in any way. That even means changing your own oil, or installing custom decals on the paint job.

On the up side, there are plenty of things that automotive leases will allow you to enjoy that traditional auto loans simply can’t.

  • A Lease Will Allow You To…
    • …Save more money. When you put less money toward a monthly car payment, that leaves you with more budgetary flexibility and spending.
    • …Drive a new car every three years. Depending on how long your lease agreement is, you can be driving the newest car while other drivers are stuck with their purchased vehicles for years on end.
    • …Worry less. When you own a vehicle, you will end up having to pay off the remainder of your loan if you do decide to turn it in early. Because lease terms are short in duration, this usually isn’t an issue.

Which One is Right For You?

Choosing between taking out a traditional automotive loan or signing a short-term lease agreement can be a difficult decision to make. Whether your ultimate decision is driven by the financial side of things, or by the promise of driving newer-year cars more often, only you can decide which one is right for you.

The team at McCluskey Chevrolet is available to help discuss this information in more depth, and help you discover which route to vehicle ownership is the best one for you to take. Come see us today and discover how a lease can help you.