Even if you are brand-new to the purchasing process, you may know a little bit about what’s involved. To be fair, purchasing a vehicle is a very straightforward process. However, one question we get a lot pertains to monthly prices. In particular, why are leases more cost-effective per month than buying a car?

The main reason why this discrepancy exists is actually very straightforward. When you buy a car, you are paying for its total value. That is expressed in its ticket price. You cover that price by taking out an automotive loan. Then, with the size and length of the loan, your APR, and your down payment, you calculate your monthly payment.

When you lease a vehicle, you are not paying for a vehicle’s full value. Rather, you are paying for its depreciation during the time you are driving it. This, couple with a down payment, helps keep your monthly cost low. That’s also why leasing is a good short-term investment, but a bad long-term one.

Furthermore, our team can answer any questions about the purchasing process. Even if this is your first time buying or leasing a car, we would be proud to help provide clarity.

If you would like to learn more, stop by today! Our team at Audi Stevens Creek in San Jose, CA would be proud to assist you. Furthermore, we an answer any questions you may have.

Visit us at your next opportunity and we can help answer any questions you may have about the purchasing process.

Categories: Finance
Tags: leasing, finance