Hybrid Cars: Buying vs. Leasing
For the most part, hybrid car shoppers prefer to purchase their green machines rather than lease them. This is partly because the high demand for hybrid cars typically means dealers are more reluctant to make affordable leasing options available when compared to traditional cars. However, leasing a hybrid may prove to be cost-effective in some instances. Keep reading to compare the differences between leasing and buying a new hybrid car to determine which option is right for you.
Buy vs. Lease - Comparing Cost
There are several factors that go towards deciding whether a lease option is more cost-effective for you in the long run. First and foremost, is the question of how much money you have available to make a down payment. If your current bank reserves are a little low, then leasing a hybrid car may prove beneficial. This is because higher down payments typically result in reduced long-term monthly payments. This effect is even more pronounced when purchasing rather than leasing.
Regardless of the amount you plan to pay down, lease contracts typically come with more affordable monthly payments. This is because you are only paying to cover the cost of vehicle depreciation (as opposed to the actual value of the car). As such, if you are on a tight budget and not willing to compromise on the hybrid of your choice, then leasing may be a good option.
If you want a simple way to compare the estimated cost of ownership vs. leasing, then you might consider using an online payments calculator. For example, Toyota offers a handy Payment Estimator that easily compares purchase and lease estimates for the new Toyota Prius.
Hybrid Car Leasing Considerations
In most instances, purchasing a car tends to be more cost-effective than leasing. However, leasing a hybrid car may be a good idea if you plan on getting a new vehicle after two to three years of ownership. If such is the case, then leasing makes the process of upgrading easy - all you've got to do is hand the keys back over to the dealership and sign a new lease on a new car. In addition, the lower monthly payments associated with leasing may mean you save money in the long run.
That being said, hybrid cars tend to hold value better than traditional cars. Because of this, the ability to sell a purchased hybrid at a relatively high Kelly Blue Book value may still make it a worthwhile option for drivers who like trading in cars fairly regularly.
Downsides of Leasing a Hybrid Car
The lease agreements for hybrid cars often are not very flexible and may result in penalty payments in the long run. For example, the typical lease stipulates an estimated 15,000 miles of driving per year. If you drive more than this, then you may end up paying a penalty of 15 to 20 cents for each mile that you drive beyond the stipulated lease agreement.
Similarly, if you foresee potential vehicle damage (spilled drinks from kids, upholstery damage from hauling machinery, etc.), then purchasing may save you the need to pay damage penalties when it comes time to get a new car.
Additionally, monthly lease payments on hybrids tend to be above average when compared to leasing traditional cars. For this and other reasons, the vast majority of hybrid car shoppers choose to purchase their vehicles rather than lease.