Lease vs. Finance

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What’s the best path? Buying a VW or Signing a VW Leasing Contract? No matter which route you take, you’ll be able to drive around the Fairfax and Washington D.C. areas in a new Volkswagen model that you love. Find the right option for you at Stohlman Volkswagen in Tysons, and take the next steps today!

Lease vs. Buying: Vehicle Cost and Monthly Payments

VW Leasing Pros and Cons: Lower monthly payments, Lower total cost, No growth of equity.

  • Monthly payments are usually lower when you lease a VW. Why? When you lease a VW, you only pay for the VW depreciation, not the full purchase amount of the car. That said, there’s only a slight chance that you’ll be able to lease a used car.
  • Although special VW Sign & Drive events can help you save big on a down payment, you should keep in mind that other payment components are associated with leasing. These components include rental charges, sales tax, use tax, and other related fees.
  • At the beginning of a lease, you may pay cap cost reduction, government or lessor charges, insurance, first monthly payment, security deposit, any prior lease or credit balance.
  • The total cost of leasing a vehicle is generally lower than financing. This is due to lease savings on depreciation and gap coverage. However; it is harder to build equity when you lease.
  • There is NOT a Federal law that requires a standard calculation and disclosure of a lease rate.

VW Financing Pros and Cons: Higher monthly payments, Higher total cost, Build equity with full ownership.

  • Monthly payments are higher when you buy/finance a VW because you are paying for the entire purchase of the vehicle plus taxes, fees, etc. However; at the end of the loan term, you will own your VW.
  • At the beginning of a loan term, you may pay the full vehicle price or a down payment. You will have to pay sales tax or other state taxes, government or lender charges, insurance, first monthly payment, a security deposit, prior vehicle loan balances, or a prior credit balance.
  • The total costs for financing a vehicle are generally more than leasing. However; at the end of the loan term you own your vehicle.
  • There is a Federal law that requires a standard calculation for disclosing Annual Percentage Rates (APR).

Lease vs. Buying: Options and Restrictions

VW Leasing Pros and Cons: More restrictions on how much you can drive and where you can move, but with fewer risks.

  • When your lease term is up, you’ll usually return your VW. You might also choose to “walk away” from your lease, although the latter option does involve some end-of-lease costs. Some lease requirements restrict you from moving out-of-state with the vehicle. If you are considering a future move, you may want to check the terms of your lease closely!
  • While the VW is leased, the title will be in the lessor’s name. During the lease term, it is your job to insure, maintain and register the vehicle. Although most leases also have specific maintenance requirements, you may have to pay for wear & tear charges when you return the vehicle.
  • Most leasing contracts also include mileage restrictions and other sorts of limits, to ensure that the vehicle maintains its value while it’s in your hands. If you think that you will drive a considerable amount (making frequent road trips or long commutes each day), you may want to increase the miles on your lease. This will increase your monthly payment.
  • When your lease ends, you can return the vehicle and sign a new lease contract, or you can buy the vehicle to keep it.

VW Financing Pros and Cons: Enjoy fewer restrictions and no limits, but you take on the risk if your vehicle isn’t well cared for and can’t be resold.

  • When you are finished paying off your VW, you OWN it! The next step is up to you. You can sell your VW or keep your VW for as long as you want! You can also resell or trade-in your vehicle before your loan term is up, but be advised: This won’t remove the burden of the loan, and you’ll still have to pay it back.
  • You’ll possess the title while you’re paying off the loan, but you won’t enjoy full ownership until after you’ve paid off the entirety of your loan. Regardless, you’ll be able to drive as much as you want and make any modifications that interest you, even while you’re still paying off the loan. Note that, while you’re free to move from state to state, you lender might not want you to move out of the country.
  • When your loan ends, you can keep the vehicle for as long as it’s still performing. You can also sell it to a private buyer, or trade it in at a dealership. You won’t have to pay for wear & tear at the end of your loan term. BUT, if your vehicle has excessive wear or many miles on the odometer, it will lower the value of the vehicle and affect the trade-in or resale value.

Compare VW Leasing vs. Financing in Person with Stohlman Volkswagen!

Do you still have questions? Choosing between a VW leasing and financing agreements can be difficult, and it never hurts to talk to one of the friendly faces on our financing team. We’re just a short drive from Vienna or Reston. You can also check out our easy how-to guide on Volkswagen leasing from the comfort of your home.

For more information contact Stohlman Volkswagen or call (866) 308-5831. We can also teach you more about liability insurance, gap insurance, interest rates, or secured car loans online!

*This information is meant to inform customers and make general comparisons about buying and/or leasing a vehicle. It is not meant to sway a customer towards buying, or towards leasing. This chart does not reflect a specific lease or loan. The information on this page is adapted from an article on Edmunds about leasing vs. buying.

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