Buying vs. Leasing A Car In The Era Of COVID-19

by Lauren Beichner

Marketing Specialist

7.6.2020
|
Member Tips

While we are in the middle of global pandemic, some parts of our lives remain normal. We still drive to the grocery store, the gas station, and potentially to and from work. So, this means you still need a vehicle. You may be wondering if now is the right time to buy or lease a car.  Afterall, can you even buy a car in the middle of COVID-19? The answer is yes you can. Here'some things to consider before you buy or lease a car during COVID-19. 

Is Now The Right Time To Buy? 

You may be wondering if buying a car right now is the right choice for you. Since car sales dropped in March due to the impacts of the virus on the automotive industry, car dealerships are working hard to drive sales to make up for lost time. This means they are offering great incentives and deals for buying cars. Additionally, interest rates are at an all time low so you'll be able to get a great deal. 

The benefits of buying a car are you are actually putting your money towards something that you own. Whether you choose to do car payments or buy the car upfront, you'll eventually own the car one way or another. 

If you think that buying might be the optimal choice for you, start by asking yourself if your finances are in a good place for you to make such a large purchase. For Coastal members using a 74 month term, the average monthly car payment is $403 at a 5% APR1. Ask yourself if you would rather have your savings built up or if you are okay with making such a big purchase during these unpredictable times. 

Should You Lease Your Car? 

Deciding if leasing is the right option for you is fully based on your personal circumstances. When you lease a car, the lender owns the car but you pay monthly payments to drive the car. Leasing is a great option because there is less out-of-pocket costs associated with it. However, if you choose to lease a car, you'll never own it and you'll have to make continual payments. 

Start by asking yourself if you are okay putting money towards something you'll never own. Additonally, ask yourself if you are okay with always having a lease payment. The average monthly new car lease payment is $461.2 So, ask yourself if you would be content with spending that amount of money to just lease a car or if you would rather put that money towards a car payment and one day own a car. 

Key Takeaways 

Choosing whether to buy or lease your car depends entirely on your personal circumstances. Look at the pros and cons of each and determine which makes the most sense for you and your life. If you are looking for a lower monthly payment and you are fine with not owning the car, then leasing could be the right choice for you. On the other hand, if you could handle a higher monthly payment and you want to own a vehicle, then buying could be the optimal choice for you. 

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For a $25,000 loan amount on a purchase, a term of 48 months with a 2.84% APR fixed (includes equity discount), the monthly payment will be $552.24.

For a $25,000 loan amount on a purchase, a term of 84 months with a 3.34% APR fixed (includes equity discount), the monthly payment will be $334.65.

1. APR = Annual Percentage Rate. Oldest vehicle Coastal will finance is a 2009 model. Your rate may vary and is determined by your credit qualifications, amount financed, collateral, and loan terms. Other rates and terms available. All rates and terms are subject to change without notice. Existing Coastal Credit Union auto loans are not eligible. Interest accrues daily. All loans are subject to approval.

2. Source Statista.com. Accurate as of April 22 2020.