13210 NE 124th Street Kirkland , WA 98034 425-814-9696
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13210 NE 124th Street, Kirkland, WA 98034

Buy vs. Lease

What Affects the Future Vehicle Value?

Customer is responsible for controllable and non-controllable factors:

  • Mileage
  • Condition
  • Accidents
  • Higher gas prices
  • New models/Enhanced technology
  • New vehicle Incentives
  • Poor third-party reviews
  • Economy/market conditions
  • Weak resale value

Finance term



Finance end-of-term options

  • Keep the vehicle
  • Sell or trade the vehicle

Customer is responsible for controllable factors:

  • Mileage
  • Condition

Residual = purchase price

Lease term



Lease end -of- term options

  • Purchase the vehicle
  • Sell privately/pay off residual
  • Negotiate trade-in
  • Extend the lease
  • Return lease vehicle

Customer Options

When Financing:

  • Customer will own the vehicle without a lien after the term of the loan.

When LEASING, customer delays the purchase decision and has options:

  • Buy it and keep the vehicle
  • Buy it and sell the vehicle at a profit (If market above residual value).
  • Buy it and trade it for another vehicle (if market above residual value).
  • Extend the lease
  • Return the vehicle to the dealer with no resale or trade-in hassles.

Choosing to lease may offer the additional benefits of lower monthly payments and less cash outlay than with a retail contract.

Wear & Use Considerations

When Financing:

  • Owner is responsible for all wear and use.
  • As wear and use increases, vehicle depreciates
  • At time of trade or sale, wear and use negatively affects the market value of vehicles.


  • Lender is responsible for all normal wear & use.
  • Lessee is charged for excess wear and use.

Refer to sample condition report for example of both normal and excess wear, as callout as to the Excess Wear & Use Protection Plan brochure and the Lease-End brochure. Note that the EWU Protection Plan is not available in all states.

Mileage Considerations

When Financing:

  • Owner is responsible for miles - ALL
  • AAA Study mid-size sedan, 5 years*. - .374/mile


  • Standard mileage allowance - 15,000/year
  • Additional miles at inception - .10/mile
  • Excess miles at lease end - .15/mile

*AAA's 2012 "Your Driving Costs" study

Considering Paying Cash?

If paying cash to avoid interest:

  • In exchange for all the payment upfront, the Lender discounts the money factor and rent charge.
  • The cost of money represented by the rent charge may be lower than other lease or finance programs

If Paying cash to avoid monthly payments:

  • There are no monthly payments with a 1-Pay lease

Investment or Expense?

  • It may not be the best use of a customer's cash to tie it up in a fixed asset (the vehicle that depreciates), rather than something that might increase in value.
  • Leaves cash available for an emergency or opportunity
  • Fixed residual value (based on mileage and condition) provides market protection.