If you intend on using your Land Rover for light duty purposes and without accruing a large number of miles on an annual basis, you may want to consider leasing. We are not going to get into the “lease vs. buy” debate from a financial perspective. Countless websites have posted countless calculators that show you almost to the penny how the financials break down. For the aspirational Land Rover driver, the lease vs. purchase debate usually comes down to lifestyle and personal preferences and not whether you will save a few hundred dollars over a three year lease.

Pros & Cons of Purchasing a Land Rover

Leasing Pros & Cons | Purchasing Pros & Cons | Current Leasing Offers

Purchasing Pros

You own it. You can use your Land Rover off-road or modify it to your personal tastes and specifications with no penalty. There are no penalties for incidental damage or wear beyond repair costs. Toss a bike up on the bike rack and make a little dent in the roof? With a lease, that will likely cost you. As an owner, it’s merely an annoyance you can fix when and if you choose to do so.

Freedom from car payments. If may not seem like it when you are 20 months into a 60 month term, but eventually your payments will come to an end and you will own your Land Rover outright. At that point you are completely free to do with the vehicle as you wish.

No fixed ownership period. You are free to sell the vehicle at any time assuming the sale results in your lender reaching satisfaction on the terms of your financing arrangement.

Unlimited mileage accrual. Land Rover over-mileage penalties are quite harsh. As an owner, you could drive your Land Rover for 30,000 miles a year if you so choose. Your only added expense is the increased frequency of maintenance intervals.

Potentially lower insurance premiums. If the vehicle is financed, you will likely have insurance minimums that must be maintained to remain in good standing with your auto finance company. However, when the vehicle has been paid off you have a great deal of latitude when it comes to setting the insurance minimums that suit your needs and risk tolerance.

Equity in the vehicle. You will get money back out of your Land Rover when you sell unless you are forced to sell the vehicle while it is “upside down” and you owe more than the vehicle is worth.

Flexible payments. Whereas lease payments are fixed for the life of the lease, standard vehicle financing allows for the early repayment of the loan. Adding a relatively small amount to each monthly payment can shave off months at the end of the term.

Purchasing Cons

Higher monthly payments and acquisition costs. When you purchase a Land Rover you are paying for the entire vehicle rather than the portion you use (as you do with a lease). This results in a higher monthly payment. Additionally, retailers will request up to 20% down on the value of a vehicle and you will pay sales tax on the entire purchase value, which increases your up-front acquisition costs. Sales taxes can usually be rolled into the financing if you are not opposed to paying interest on the tax.

Potential upside down finance situation. You may find yourself upside down on the loan, where you owe more than the vehicle is worth. Depending on how fast the vehicle depreciates, there could be a period where you would not be able to sell your Land Rover for more than what you owe and be forced to make up the difference out of your pocket should the need to sell arise.

You can’t walk away. If you are unlucky enough to purchase a vehicle that has reoccurring warranty issues, you may find yourself in a difficult situation, especially if you are upside down on the loan. Also, when it comes time to sell or trade in the vehicle, you will find yourself attempting to determine a fair value and dealing with potential buyers.

Your warranty expires. Land Rovers vehicles have a 4-year/50,000-mile limited warranty. Once the factory warranty expires you will either have to go without a warranty or purchase an extended warranty contract from a third-party provider. Extended warranties can be quite costly.



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October 20, 2011

RoverGuide

Articles, Buying & Ownership