Buying A Car
Visiting a car dealership can be a stressful situation because of all the choices you face. One of those choices is financing--whether you want to purchase a car with an auto loan or lease a vehicle for a specific term. There are advantages and disadvantages to both choices, and only you know what will best fit into your lifestyle and budget. Here are a few points to consider with both financing options.
Purchasing a new car outright, whether with cash or an auto loan, is the most common choice among drivers. Around two-thirds of all new car transactions each year are outright sales, not leases.
- Purchase a vehicle
- Customize it to their desires
- Pay off the loan
- Be payment-free for as long as possible as they drive the car until tit cannot go anymore
- Higher monthly payments
- Having to foot the bill for repair costs once the vehicle is out of the warranty period
The other one-third of new car transactions are leases, which means you basically "rent" a vehicle from a dealership for a fixed period and an agreed-upon amount of money.
- Leases on new cars provide you with the latest safety features
- The car is always under warranty
- You don't have to worry about repair costs.
- Lower monthly payments (around $100/month less than loan payments).
- Mileage restrictions
- A cycle of paying a monthly car payment without anything to show for it at the end of your lease term.
There are many reasons why you might choose a loan over a lease or vice versa. High-mileage drivers might find that buying is the only option because of mileage restrictions on leased vehicles. Business owners might want to purchase a vehicle but find that leasing makes the most sense because of the lower monthly payments and less cash outlay.
The financing or leasing choice is all yours.