To help you prepare, we want to outline the differences between leasing and financing.
Leasing guarantees you’re driving one of the latest models, with dynamic style and the most up-to-date vehicle technology. This method is often a cheaper alternative to financing, as you won’t need as large a down payment. This also means your monthly payments should be less.
Though you’re expected to return your lease after the agreement ends, you can finance or purchase it at any time, which can help those who’ve exceeded the mileage limit in the agreement. However, if you want another lease, you can easily jump into a new one once your current plan ends.
Additionally, you might not be responsible for routine maintenance during your lease. Many come with warranties that cover most, if not all, maintenance.
Financing is a long-term agreement between you and a lending company in which you pay the entire price of the car over several years. After you complete the payment cycle, you’ll own the vehicle outright.
After you finish making payments, you can customize your car any way you want or turn around and sell it privately or to a dealer.
By financing your vehicle, you can build equity. So, if you decide to sell, its resale value should remain high, especially if you keep it in good shape—mechanically and aesthetically.
If you’re looking for a way to build your credit score, financing can help with this. When you apply for an auto loan, you’re opening a line of credit. So, making payments on time will help your score increase.
