Buying or Leasing a Car? 6 Terms You Should Know

Like with any industry, car dealerships have their own jargon. When you walk into a dealership, you may hear the salespeople using terms like "invoice price," "MSRP," and "residual value," but do you really know what they mean? It's important for consumers to understand these terms so that they can make an informed purchasing decision. Read on to understand the key terms you may hear at the dealership. 

Invoice price: The invoice price is the original amount the car dealership pays the car manufacturer for each vehicle. This price does not always reflect the dealer's final cost due to rebates, discounts or incentives. 

MSPR: MSPR stands for Manufacturer's Suggested Retail Price. Also referred to as the sticker price, this is the figure that's most visible on the car's window sticker. It's also the price listed in advertisements for the vehicle. Dealerships often begin negotiations at the sticker price. Unless the vehicle is brand new or the model is in high demand, cars can sometimes be bought for less than the sticker price.

Residual Value: Residual value refers to how much the car will be worth at the end of its lease. Dealers use residual value to calculate the lessee's monthly payments. Generally, the longer the lease period, the lower its residual value is.

Realized Value: This is the actual market value of a leased vehicle at the end of the lease. 

APR: Annual Percentage Rate (APR) is the total amount you pay for your auto loan, including the interest rate and other fees. It is expressed as an annual percentage of the amount financed. With fixed-rated financing, the APR stays the same over the course of the contract. With variable-rate financing, the APR increases after a specific time period. 

GAP: Guaranteed Asset Protection (GAP) is an optional coverage for car buyers. It protects you in the event that your car is stolen or totaled in an accident. GAP covers the difference between what is owed on the car loan and what is covered by insurance. 

If you come across other terms you don't understand during your visit to Springfield Toyota, don't be afraid to ask the salesperson to explain them to you. You want to ensure you understand the terminology and the terms of the sale before moving forward.

Should You Buy or Lease a New Car?

Are you looking to ring in the New Year with a new car? If you're in the market for a new car, you've likely debated whether you should buy or lease. There are advantages and drawbacks to both, and the route you choose will depend on your financial situation and lifestyle choices. Read on to learn the pros and cons of buying and leasing a car.

Buying a New Car


If you plan to drive the vehicle for a long time, then it's probably best to buy rather than lease. When you buy a car, you own the vehicle outright once the loan is paid off. Since you own it, there are no mileage restrictions, and you can customize the car any way you like. Another major advantage is you can build equity throughout the life of the loan, which can help you buy your next vehicle. And, as the owner, you can choose to sell or trade in your vehicle whenever you want.


While you can often predict a vehicle's future market value, nothing is set in stone. Changing market conditions can affect the value of the car when you go to sell it or trade it in. Another drawback is buying involves a considerable down payment, with many lenders requiring 10 or 20 percent. It can also be difficult to secure monthly payments that fit within your budget.


Leasing a New Car

Many consumers are confused about how leasing a car works. When you lease a car, you pay the difference between the vehicle's price and its anticipated value at the end of the lease term. This is known as the residual value. Once the lease term is up, you return the vehicle to the dealership. 

Leasing requires a smaller down payment than financing a new car. But, like with buying, the larger the down payment, the better your monthly payments. In most cases, the monthly payments for a lease are lower than a monthly loan payment, unless you have a high-value trade-in or hefty down payment. 

Leases typically last about three years. Leasing can be ideal if you prefer having the latest technology and safety features, as it allows you to drive a new car every three years. Another benefit is during the lease term, the vehicle is usually covered under the manufacturer's warranty, which can save you money on unexpected repairs. However, you are still responsible for maintaining the car, including oil changes, tire rotations, and so on. Failure to maintain the car properly can result in fees at the end of the lease term. 

Along with these perks, leasing has some drawbacks too. Because you don't own the car, there are restrictions on how many miles you can put on the vehicle. The typical mileage range is between 9,000 and 15,000 miles a year. If you do a lot of driving, this is probably not the right option for you. If you exceed the mileage, then you will have to may overage fees at the end of the lease term. You will also incur additional fees if you do not return the car in its original condition. It cannot be returned with any damages or alterations. Another downside is leasing is like renting; you don’t build any equity that can be applied to your next car.

These are all important factors to consider when determining whether you should buy or lease a new car. Whether you choose to buy or lease, our New Jersey Toyota dealership can help you get the best deal on a new car. Visit our dealership, located on Route 22 in Springfield, today.

Lease a New Toyota in New Jersey for Only $109 a Month

Did you hear the news? We at Autoland, NJ car dealership and lender, have all-new models of the Toyota available for lease! These models include the 2015 Toyota RAV4, the 2015 Toyota Camry, and the 2015 Toyota Corolla. We have many of these vehicles stocked in our inventory in a wide variety of colors and with a number of different options and accessories. What's more, Autoland is currently holding one of the best Toyota lease deals in NJ, in which you can choose any of these cars for the low price of $109 a month! These three vehicles, while very different in style, are all known for their quality of design, durability, and reliability. Here's a breakdown of each style to help you choose between them and learn why they are so great.

2015 Toyota RAV4

These vehicles are ideal for families, as they are extremely safe and offer plenty of room for you and your kids (safely holding up to five passengers). They boast 4-cylinder engines, cruise control with steering wheel controls, and many other luxurious features. Many people love the 2015 Toyota RAV4 because it is a modern, comfortable take on the traditional SUV, yet is still highly practical for everyday use. Click here to browse Autoland's current 2015 Toyota RAVE4 inventory and to learn more.

2015 Toyota Camry

The 2015 Toyota Camry is a bit sportier than its RAV4 counterpart. The vehicle has a smaller 2.5L engine, 6-speed automatic transmission, cruise control with steering wheel controls, and many other exciting features standard. However, don't be fooled by the sportier appearance – the 2015 Toyota Camry is still just as spacious as the Toyota RAV4 and is also capable of holding five passengers. People enjoy the 2015 Toyota Camry for its cutting-edge style and use of modern technology. The vehicle even features a wireless charging station for your cellphone and other devices, without the hassle of all the cords! Learn more about the 2015 Toyota Camry on our website here.

2015 Toyota Corolla

The 2015 Toyota Corolla is pretty similar to the 2015 Toyota Camry, but with a slightly smaller engine. These vehicles feature a 1.8L engine with a 4-speed automatic transmission. Just like the 2015 Camry and the 2015 RAV4, the 2015 Toyota Corolla also safely seats five passengers. It also features great modern technology that may even be a bit more advanced than that of the 2015 Camry. This technology includes standard Bluetooth, a backup camera, voice recognition, steering wheel controls, and more.

Regardless of whether you choose the 2015 Toyota RAV4, the 2015 Toyota Camry, or the 2015 Toyota Corolla to lease, you'll be guaranteed to have a top-notch vehicle. Leasing provides you with many benefits, including the ability to obtain a new and modern vehicle that you otherwise might not be able to afford. Plus, Autoland offers the best Toyota lease deals in NJ, which allow you to pay a minimal amount each month and making the payments much more manageable for you.