Open Today! 9:00 AM - 8:00 PM
Open Today! 9:00 AM - 8:00 PM   |   Log In  |  Sign Up
4190 W Andrew Johnson Hwy Morristown, TN 37814 (423) 799-2386
4190 W Andrew Johnson Hwy, Morristown, TN 37814
Sales: 423-200-4610 | Service: 423-254-5031 | Parts:

Compare the Costs: Buy vs. Lease vs. Buying Used

Compare the Costs: Buy vs. Lease vs. Buying Used

Wondering whether you should lease or buy? Will the cost of a lease be less than buying the same car? What about the total out-of-pocket costs? And if you decide to buy a used car, how much can you save?

These are some crucial questions for consumers who want to manage their automobile finances smartly for the next few years. It can be hard to deliver one right answer as the costs and benefits will differ per budgets, usage and consumer choices. To help you decide, let’s look at one family sedan, three financing models and an average ownership period of six years. Normally, a lease cycle is for three years, so let’s consider two lease cycles with one buying cycle for new and used cars.

Leasing


Normally, a lease for a midsize car that sells for around $24,775 will have drive-off fees of $1,154. This will result in monthly payments of $294 for a period of three years.

Buying a New Car


If you’re considering buying the same car, the down payment on average will be around $4,104. With an average interest rate of 1.64%, the monthly payment will go to nearly $400.

Buying a Used Car


Let’s consider a similar car that has been used for three years. Its average price will be around $15,688. The interest rate will be much higher, nearly 6.04%. With an average down payment of $2,304, the monthly payments will go to $300 on average. (As per Edmunds data, there are lower interest rates available for used cars as well, however, people shopping for this category tend to have a lower credit score.)

Comparing Long-Term Costs


After a period of six years, the total out-of-pocket costs will be the least for a used car - $20,364, followed by a leased car - $23,476 and the highest for a new car - $28,104.

However, the costs of repair and maintenance are excluded in these numbers. In the case of a used car, these costs may be higher compared to a new car or a leased car that’s relatively new.

Final Worth


It is important to note that at the end of two lease cycles, the consumer who leased the car doesn’t own it. So, they either have to begin a new lease or a purchase cycle. On the contrary, the consumer who bought the vehicle now owns a six-year old sedan which might be worth around $9,687 on the private market. The consumer who purchased the used car will now own a nine-year old sedan, worth around $4,794. When you deduct the current value of the car from the out-of-pocket costs for the consumers of buying new or used cars, the long-term picture changes.


Now, the final cost of buying a used car is the minimum at around $15,570, followed by buying a new car at around $18,417 and finally a leased car at around $23,476.

Buying a new car brings pride of ownership that can’t be calculated in terms of dollars. Plus, you can enjoy unlimited driving without any mileage penalty. However, for those who like to drive new wheels every few years and don’t want the hassles of owning a car, leasing might be a good option.



Dealer Information
Honda Morristown 4190 W Andrew Johnson Hwy Morristown, TN 37814 Get Directions
Sunday:
CLOSED
Monday:
9:00 AM - 8:00 PM
Tuesday:
9:00 AM - 8:00 PM
Wednesday:
9:00 AM - 8:00 PM
Thursday:
9:00 AM - 8:00 PM
Friday:
9:00 AM - 8:00 PM
Saturday:
9:00 AM - 7:00 PM
Sunday:
CLOSED
Monday:
7:30 AM - 5:30 PM
Tuesday:
7:30 AM - 5:30 PM
Wednesday:
7:30 AM - 5:30 PM
Thursday:
7:30 AM - 5:30 PM
Friday:
7:30 AM - 5:30 PM
Saturday:
8:00 AM - 4:00 PM
Phone:
Sunday:
CLOSED
Monday:
CLOSED
Tuesday:
CLOSED
Wednesday:
CLOSED
Thursday:
CLOSED
Friday:
CLOSED
Saturday:
CLOSED
Phone:

Building your garage...


Garage Icon