If you’re in the market for a new car, you have two payment options to choose from: you can either pay cash or finance or purchase, or you can opt for a lease. We’ll explore the benefits and drawbacks of each option.
Financing a Car
If you choose to finance your car as most consumers do, this means that at the end of your loan, you will own the car outright. It also means that you can essentially do whatever you want with your car. You can make a cross-country trip every month without worrying about the mileage. And you can even sell your car whenever you want, even before your loan is paid off.
However, there are a few downsides to financing. You will usually end up with a higher monthly payment, as opposed to a lease. And you will be making that payment over a longer period of time (often five or more years). You also might need a bit of money upfront for a downpayment, sometimes as much as 10 to 20% of the purchase price.
Leasing a Car
One of the biggest incentives to leasing is the fact that you can get a nicer car for less money. Monthly lease payments tend to be smaller than monthly finance payments meaning you can fit more car into your budget. And leases usually require less money up front, sometimes as little as $0. If you like having a new car every few years and like having the most advanced safety features, then leasing a car is probably better for you.
The downsides to leasing include mileage restrictions, typically 15,000 miles per year or less; you can’t make any changes to the car; and you don’t gain any equity while making your lease payments.
Still need help sorting through the options? The knowledgeable staff here at Sanderson Ford can help you figure out which option will work best for your lifestyle.