Leasing vs. Buying a Car in South Florida: What's Right for You?

5 MIN. READ

 

Key takeaways: 

• Is leasing a car better than buying? It can be if you want a newer vehicle with little to no maintenance needs.
• However, purchasing a car means you can sell it later or use its trade-in value when it's time for an upgrade.
• If buying a car makes the most sense for you, make sure you pick the right car loan to avoid overspending on this important purchase.

Is it time to replace your current vehicle? Getting a new car is a major decision, and one of the first things you’ll have to figure out is whether you want to buy or lease.

The best option depends on your unique financial situation, and we recommend weighing the pros and cons of buying vs. leasing so you have a better understanding of how your decision will impact your budget.
 

How Do Car Leases Work

You can think of car leasing as signing a long-term rental agreement. You get to drive your car for 24 to 48 months in exchange for a monthly payment, and, when the lease is up, the car goes back to the leasing company.

Leasing a car tends to cost a little less than buying it, but you’re still looking at the following costs:
 

• A down payment can reduce your monthly car lease payments.
• Monthly payments to the leasing company, which includes the money factor (the equivalent of an APR for a lease). In Florida, auto lease payments average $670 a month.
• You’ll have to pay a one-time acquisition fee to cover administrative costs from the leasing company.
• There are also some sales tax and registration fees.
• The leasing company might ask for a security deposit, which you can get back at the end of the lease.
• You'll have to pay for full insurance coverage for the duration of the lease.

Leasing Vs. Buying a Car: What Are the Benefits of Leasing?

Leasing is fairly popular in Florida, with more than 36% of cars on the roads falling into this category.

Here's why so many drivers choose to lease:
 

• Several factors influence your monthly payments, from your credit score to the car you pick. However, it’s possible to spend less compared to buying a similar vehicle.
• Even though you’re responsible for maintaining your leased car, you’re far less likely to run into any major repairs since you’re driving a brand-new vehicle.
• You can save on upfront costs by skipping financing fees and making a smaller down payment compared to buying your car.

Beyond financial considerations, we often see members pick a lease because this option gives them access to the latest safety and comfort features. And after their lease is up, they get to change cars without any of the worries linked to owning an asset that depreciates. Plus, leases can be flexible, with many agreements giving you the option to buy your vehicle at the end of the lease.

That being said, leasing companies often have mileage restrictions and will charge you more if you go over. For this reason, a lease makes more sense if you have predictable driving habits.
 

When Does It Make More Sense to Buy a Car?

You’re familiar with the concept of buying a car: you pay for the vehicle and own it outright. However, the reality is that a majority of buyers finance this major purchase.

The lender gives you the funds to buy the car from the dealership and places a lien on the car's title, which isn’t removed until you’ve paid off your loan. 

This means you’re paying for:
 

• A down payment to reduce the cost of financing as much as possible.
• Monthly auto loan payments, including an APR or interest rate.
• Loan origination and documentation fees will go to the lender.
• Title and registration fees, as well as sales tax. In Florida, registering a vehicle costs less if you’re buying it than leasing.
• If you’re financing a the dealership, which we don’t recommend, you’re also paying the dealer’s financing fee.
• You’ll also need to pay for full coverage insurance until you pay off your car loan.
• As the owner of the vehicle, you’re also responsible for maintenance costs and repairs.

You’re looking at spending more upfront, but buying a car makes a lot of sense financially speaking if you’re looking for a long-term commitment.

As long as you keep up with maintenance, you can slow down depreciation and preserve the value of your car. Because you own it, you’re free to sell it once the loan is paid off or bring it to a dealership and take advantage of its trade-in value when you’re ready to buy something else.

You also have a lot more freedom and can drive as many miles as you want or even customize your vehicles. Plus, you won’t have any restrictions on things like lending your car to a friend, using it for a freelance taxi or delivery gig, or teaching your teen how to drive.
 

More About Car Financing

To get the full benefits of car ownership, it’s important to pick the right car loan. Here’s what we recommend:
 

• Instead of financing at the dealership, get pre-approved in advance. This gives you time to shop around and compare APRs and lending fees.
• Credit unions typically give you a better APR, lower fees, and look at more factors beyond your credit profile.
• Getting the right car is just as important as choosing the right lender. A gently used vehicle is a great buy and will often give you more value for your money compared to a brand-new car.

How Power Financial Credit Union Makes Car Buying More Affordable

With up to 100% financing and competitive rates, we’re committed to making car loans accessible for our members throughout South Florida. Our flexible loan terms fit your budget, and our partnership with Auto Advisors means you’ll get help from experts when shopping for your new vehicle.

If you’re looking to finance your first car, we offer a program for first-time car buyers with low rates and no credit history required.

Check out our car loan rates and see how we can help you finance your next vehicle.

FAQs About Buying vs Leasing a Car

 

Should I lease or buy a car? 

When to lease vs. buy a car depends on your unique situation. Leasing makes more sense if you want to spend less upfront and would prefer to drive a brand-new car, but buying means you’ll have an asset to resell.
 

What are the main pros and cons of leasing vs. buying a car?

Leasing tends to come with lower monthly payments but has some restrictions. Buying a car means you have to shop around for the right loan and spend more on a down payment, but ownership gives you more freedom.

Can I buy my leased car at the end of the lease? 

It depends on the lease agreement you signed. Many leasing companies will give you the option to buy your car when the lease is up.
 

What makes credit unions a good option for car loans? 

Because credit unions operate on a not-for-profit model, you’re more likely to get lower fees and APRs on your car loans. Plus, credit unions often look at additional factors besides your credit score when making a lending decision.