When the time comes to find yourself a new ride from your local Mazda dealership near Shreveport, LA, you have two main options. Unless you’re one of the lucky few who can walk in and buy a new car with cash, you can either finance it or lease it. So, which one should you choose?
For many shoppers, the decision will be easy, but they’re both still worth considering.
At Family Mazda of Bossier City, we pride ourselves on helping our customers to make informed decisions, so here’s an in-depth look at the pros and cons of leasing and buying so you can make the right call for yourself.
Pros and Cons of Financing a Car
When you buy a Mazda by financing it, you borrow the money from a lender like a bank or credit union, then pay the money back over time. Payments go toward the loan amount (also known as the principal) and the additional interest.
If you stick to the payment schedule, the average auto loan takes between 4 and 7 years to pay off, but many savvy buyers choose to make extra payments, which can greatly reduce the interest paid and shorten the loan length.
| Pros | Cons |
| Ownership Equity Greater choice No stipulations | Up-front costs Higher payments |
Pro: Ownership
Perhaps the biggest advantage of financing a car is that, eventually, you’ll own it. After the loan is paid in full, you’ll receive the title and it’s yours, free and clear. For many shoppers, this is the most important factor, because it frees them from having a car payment forever. Ownership also allows you to make any alterations or modifications to the car.
Pro: Equity
Leasing can lead to significant short-term savings. However, financing a car and eventually paying it off is arguably the best option for long-term savings. This is especially true if the car is well taken care of, because you can potentially enjoy years without a car payment or turn around and sell it for a profit. Savings can be even further maximized if you choose a brand like Mazda, which tends to hold value better than average.
Pro: Greater Choice
Going the traditional financing route can give you more options for vehicles. Some dealerships limit the number of available leases, and most dealerships don’t allow you to lease pre-owned models at all.
Pro: No Stipulations
Lease agreements usually dictate that you can only drive a certain number of miles per year. When it’s time to return the lease, if the car has undergone excessive wear and tear, the lessee may be charged additional fees. This makes financing a better option for people who use their car to travel a lot, or owners who have a hard time keeping a clean vehicle.
Con: Up-Front Costs
Conventional wisdom says that when you finance a car, you’ll want to budget about 20% of the loan amount for a down payment. Some borrowers may have a hard time coming up with enough cash on short notice, which means they may have to settle for a less expensive car.
Con: Higher Payments
When you finance a vehicle, you’ll have to take out a loan for most or all of the car’s value, which means that monthly payments can be fairly high. On the other hand, lease payments are calculated using the car’s current value versus the projected value at the end of the lease. The smaller amount can lead to significantly lower monthly payments compared to financing.
Pros and Cons of Leasing a Car
You can think of a lease as a long-term rental. You make a monthly payment to the dealership, and you get to drive the car for a predetermined period, usually about 2 or 3 years. After that, you typically return the car.
Some folks think that leasing is only for people with loads of money, but in fact, the opposite can be true because leasing can save you a lot of dough in the short run.
| Pros | Cons |
| Lower payments Lower service costs Modern features Easy lease-end process | Fewer pre-owned options Lack of equity |
Pro: Lower Payments
As we mentioned a second ago, when you lease a Mazda, you’re only paying for the expected depreciation over the lease term. Since you’re not paying for the full value of the car, it may be easier to fit into your monthly budget, allowing you to save more money over time.
Pro: Lower Service Costs
Because the vast majority of leased vehicles are new or nearly new, the chances of the car needing major repairs is quite low. If you do end up needing unexpected repairs, it’ll likely be covered under warranty. Some lease agreements also include extra perks like routine maintenance and roadside assistance.
Pro: Modern Features
If you’re the type who enjoys driving a new car with the latest comfort, safety, and infotainment features, leasing can allow you to trade your car every few years much cheaper than financing.
Pro: Easy Lease-End Process
After your lease term ends, you’ll have a couple of different options—you can simply sign up for a new lease and continue without a hitch or finance a new car with all the money you saved. Some lease agreements also have a lease-end buyout option that allows you to keep your current lease and finance the remaining value, which can often end up being a fantastic deal.
Con: Fewer Pre-Owned Options
Can you lease a used car? The short answer is, usually not. Most dealerships have different deals for pre-owned vehicles, so if you’re looking for a quality used car, financing may be your only option.
Con: Lack of Equity
Unless your lease agreement has a lease-end buyout option, you’ll never own the vehicle. While this may be a good deal on a month-to-month basis, you may end up spending more money in the long haul, so it’s important to do these calculations before you make your decision.
Lease a Mazda CX-5 Near Texarkana
There’s no one-size-fits-all solution to getting the best deal on a new car, and that’s why our team at Family Mazda of Bossier City likes to take a personalized approach to help you save the most money possible. If you have any more questions about whether leasing or buying is the right call for you, the pros in our finance center are happy to help. You can also use our online tools to get pre-qualified, calculate your monthly payments, and more.
Our Mazda dealership is at your service. Contact us online or give us a call at (318) 746-2175.
