There are a number of factors to consider when shopping for a new car, including how you’re going to pay. There are primarily two options for acquiring a new vehicle: leasing and financing. Both have their advantages. So how do you decide?
Let us help.
Leasing vs. Financing
Before we get into the advantages of each, it may be helpful to take a step back and define the terms.
When we talk about financing, we’re referring to getting a loan. You may get this loan from a bank, credit union, or the dealership itself. Just like your home mortgage loan, your car loan will require a down payment and then some monthly payments until the vehicle is paid off. And when the loan reaches its maturity, the car is yours and you own it outright.
Leasing a vehicle essentially means you’re paying to drive the car, usually for a predetermined span of time (think of it like renting). At that point, you can renegotiate the lease, either for the same car or for a newer one. A key distinction here is that, when you lease, you never actually own the car in question.
Which Is Better?
Neither option is inherently better than the other, and it really boils down to your financial situation as well as your goals. There are some distinct benefits to consider:
Start with leasing:
- You’ll typically have lower monthly payments
- The down payment requirement will be lower, too
- The lease will include a warranty that covers most, if not all, repairs
- You can renegotiate and get a new car every couple of years
As for financing, some of the main considerations include:
- Eventually, you’ll own a car
- You have more choices with regard to the insurance coverage you select
- You’re free to modify or add aftermarket parts without any contractual issues
- Once the car is paid off, you’re free to sell it
Choose the Right Payment Plan in Madison, WI
One final note as you weigh these two options: At Zimbrick Acura, our aim is to provide transparent, flexible pricing, no matter which path you ultimately choose. We want to make it as affordable as can be for you to get your next vehicle. Learn more by contacting our finance center today.
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