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A Tale of Financing Options: Buy or Lease

January 15, 2017

A Tale of Financing Options: Buy or Lease

The question of buying or leasing your next vehicle is nothing new. The good news is both options have advantages depending on your preferences and lifestyle. Although I self-identify as an ideal lease customer, I know it’s not for everyone. Perhaps we can borrow a lesson from Aesop’s Fable — “The Country Mouse and The City Mouse” — and look at the benefits of each.

On a long country road lives a man who loves his late-model truck. Bear, as he calls it, has everything he wants — from the metal-flake paint job and 20-inch rims to the roll bar in the back. Just a few more payments and the title is his. Then one day his cousin arrives from the city in a gleaming new truck.

His cousin hops out, runs his fingers along the shiny pearl-coat finish and greets him with, “So what do you think? I’ve only had it a few months. I thought you might be ready to get into something newer yourself. Want to take it for a spin?”

They climb into the new truck and the man is in awe of his cousin’s leather seats and locking under-seat storage. “What is that?” the man asks, pointing to the big display on the dash.

“Many new trucks come with the latest technology, like this in-dash display, Bluetooth connectivity and a rear vision camera, which makes parking in the city a breeze,” the cousin answers.

Upon hearing this, the man glances back at the dusty truck parked in front of his house. Suddenly, he’s not satisfied anymore and exclaims, “What are we waiting for? Let’s roll!”

As they tour the countryside in style, the man says, “This must cost you an arm and a leg each month!”

“Actually, my payments are less than what I was paying on my old truck,” says the cousin. “I decided to lease this one. With my trade-in, there was no additional down payment required. I made my first month’s payment and covered the amount due at signing, then drove off the lot in my new truck.”

“Wow. What did Pops say when you took it to his garage back home? I’m sure he has big plans to soup up the engine and customize the paint job.”

“Well, because it’s a lease, I can’t really make changes,” the cousin explains. “Besides, it already has everything I want. And, most of my maintenance will be done at the dealership because it’s under warranty for the entire length of my lease.”

Puzzled, the man asks, “So no custom detailing or hitch installation? No 20-inch wheels? How about mudding or cross-country road trips? Can you at least drive it as much as you want?”

“Sort of,” answers the cousin. “I signed a 36-month agreement which allows up to 36,000 miles. I looked at the option to add more miles, but decided against it. I probably won’t need that many because I hardly ever leave the city.”

As they return to the man’s house, he says, “It’s very tempting to consider getting into something new.”

The conversation continues over dinner when the man asks, “Have I got this straight? You got a new truck with the latest technology for lower monthly payments than your previous loan. However,” he continues, “you have a mileage limit and can’t make any changes to the truck.”

“True,” the cousin replies. “But it’s under warranty and I have the option at the end of my lease to trade it in and lease an even newer one often at a lower monthly payment than purchasing.”

After further consideration, the man tells his cousin on his way out, “I’m excited for you and your new truck, but I think I’ll hang onto Bear a little while longer. I’d miss the noisy growl of his engine every morning. I never know where my weekends might take me and I don’t want to worry about going over on mileage. Plus, the time I spend with Pops customizing my ride comes with too many memories.

“Besides, once I make my final payment, Bear will be mine — free and clear. Leasing’s not for me, but it sounds like a great choice for you.”

With that, the cousin happily climbs into his new truck and drives away. And the man turns his attention to giving his beloved Bear a much-needed bath.

As illustrated here, there are benefits to both finance options. Read more about leasing and explore your purchase options to learn which one is right for you.

By Lori Tutt, GM Financial

A copywriter by trade, GM Financial’s Lori Tutt has a passion for crafting the right message for the right audience. When she’s not at work or behind the wheel of her Cadillac, you’ll likely find her watching movies with the family.

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