Leasing vs Buying a New Mazda
Choices in life are a good thing. When you are in the market for a car, you will be presented with several different options for paying for your new wheels. Should you buy it? Should you lease? How will you know which is a better deal? The terms that get thrown at you are often confusing, and for such a large investment, nobody likes guessing at the answers. Making it even harder is that everybody seems to have their opinion to offer and there seems to be no middle ground.
Bountiful Mazda is here to help. We have put together a sample transaction involving one of Mazda's most popular models -- the 2021 Mazda CX-9. We will examine the numbers if you were to buy or lease the Mazda CX-9 and show you how they compare.
2021 Mazda CX-9
First, a little background on the CX-9. The CX-9 is a sophisticated three-row sport utility vehicle that offers a leather interior and a larger-than-normal 10.25-inch display screen control center. The car comfortably seats seven and offers a peppy 2.5-liter, 250 horsepower turbo engine that will get you up to speed quickly, especially when you need it.
The CX-9 pays attention to you as you drive, making quick and subtle adjustments to torque and braking to adjust to your particular driving style. The Mazda CX-9 is available in five different configurations. For this example, we'll be zeroing in on the CX-9 Sport, which is the base model in the line.
The CX-9 won't disappoint you at the pump. The EPA estimates that the CX-9 front-wheel drive gets 22 miles per gallon in the city, 28 miles per gallon on the highway; the CX-9 all-wheel drive drops to an estimated 20 mpg in the city and 26 mpg on the highway.
Before we get into the details, we should establish the terms of our scenario. Let's say that the price of the vehicle you agree upon is the MSRP of $34,160. We will also assume that you provide a down payment of $3,500, or slightly more than 10 percent. That puts the vehicle at an agreed-upon price of $30,660. Click here for a full look at the specifications for the CX-9.
Purchase the 2021 Mazda CX-9 Sport
The final variable we have to agree upon is the interest rate and length of the loan. Let's assume that you're a buyer with good credit. The U.S. average interest rate for borrowers with the best credit scores stood at 4.15% for a 60-month loan in April 2021, according to Bankrate.com. Just to keep things clear, we will also assume that you do not have a trade-in to value as part of the transaction.
With those parameters in place, the monthly payment for your loan on the 2021 Mazda CX-9 will be $567 a month, also according to Bankrate.com.
Lease the 2021 Mazda CX-9 Sport
Now let's take a look at what the cost would be if you decided instead to lease the 2021 Mazda CX-9 Sport. There are a few additional caveats when looking at a lease. Assume that the lease will last for a period of 36 months, and you most likely will be limited to about 12,000 miles a year. You also have to factor in sales tax, which for this example we will say is around 7%, with a residual value of $15,000.
With these parameters, your auto lease will cost you quite a bit less at $440.91 a month.
Monthly Payments
In our example, your auto lease will cost you about $127 less per month: $567 versus $440. That might not seem like a lot, but over the course of a year, that amounts to a savings of about $1,500. That's certainly money you can use to purchase gas for your new car or to defray the cost of insurance. But as we'll see, the benefits of leasing also come with some costs.
What Does it Mean?
Everyone would appreciate an extra $1,500 to spend or save each year. But it's important to remember that there are pros and cons with leasing. According to Consumer Reports, leasing allows you to:
- Save money on monthly payments.
- Set yourself up for a new car every two or three years.
- Drive the car when it is most problem-free.
- Take advantage of the new car warranty.
On the flip side, leasing has some drawbacks. According to Consumer Reports and other experts, with leasing, you:
- Need to meter your driving. At 12,000 miles a year or 36,000 miles for the three-year period, leasing is probably not the best choice if you make frequent long trips for leisure or for work.
- Own nothing. The car is leased from the manufacturer. You either have to buy it outright at the end of the three years or surrender it for something else.
- Risk spending more to lease overall. When you lease a car, you need to make monthly payments every month that you lease. When you buy a car, you make payments until the end of your loan, but once the loan is paid off, you no longer need to make payments on it for the rest of the car's life.
- May face unexpected costs if you have to get out of your lease early or if you put extra miles and get billed for high wear and tear.
Which One is Right for You?
Only one person can answer that question, and that's you. Whether leasing or buying is better will depend on several factors. If you need more cash in your pocket monthly and wish to preserve cash flow, you may want to choose to lease. If you favor building equity in a car and getting something back for your asset, then buying may be the best choice.
You can trust one thing for certain: The team at Bountiful Mazda is ready to work with you to find the best option for your budget and goals. Our sales team will go over the options carefully so you understand the pros and cons. Either way, whether you buy or lease, you become an important part of the Bountiful Mazda family.
Call us today with questions, to schedule a visit or to set up a test drive. You can also reach us online.