Finance Or Lease?

Key Takeaways:

• Leasing a car may be better if you don’t have an excellent credit score or a lot of money saved up.
• Leasing gets you a lower monthly payment than financing. 
• With a lease, you can get a new car every few years, and you don’t have to panic about selling the car when you're done.
• Financing a car allows you to build equity in the vehicle, and you can keep the car for as long as you want.
• You can choose to refinance a car to negotiate a lower interest rate, bringing down your monthly installments.
• If you decide to finance your first car, shop for the best interest rate and loan terms.

When purchasing a vehicle, most Americans have to choose between leasing or financing it. Both alternatives have their advantages and disadvantages, which makes selecting the best one difficult.

Supreme Nissan of Slidell will compare leasing and financing a car in this article so that you can make the most informed decision for your needs.

Car Leasing

Leasing a car is like renting from the dealership monthly, with an option to buy it at the end of the lease term. You may be liable to pay fines if you don't meet your agreement's terms and conditions.

Car Financing

A loan allows you to pay for a car over time in monthly installments. Once the loan is paid off, you own the vehicle outright. With a lease, you make lower monthly payments but do not own the car at the end of the leasing period.

What Are the Upsides and Downsides of Car Financing vs. Car Leasing?

If you're considering purchasing or leasing a new automobile, it's critical to understand the distinctions between the two alternatives. Both have advantages and disadvantages, so weighing all of your choices before making a decision is essential. Here are a few factors to carefully consider when deciding.

Once you take out a car loan and pay it off, the vehicle is yours to do as you please. With leasing, however, you don't gain ownership until the end of your contract, when you can buy it at either a discounted price or market value --whichever you can haggle for with your dealership.

With a lease, your monthly payments won't include the price of the vehicle like they would if you were financing it. It is because leases only cover the use of the car during the agreed-upon time frame.

With leasing, you must adhere to certain limitations the dealer or leasing business sets. You may be required to maintain the vehicle in excellent working order, for example, and you may be limited in terms of how many miles you can drive.

Mileage limits in lease agreements are generally 12,000 to 15,000 miles per year. If you exceed this restriction, you'll be charged a fee for each mile you drive above. The cost of surpassing the limitation may mount up quickly, so ensure your lease agreement allows enough mileage before adjusting the permitted mileage figure.

You may purchase additional miles by paying an extra fee. So, you must be cautious during your lease term to avoid taking any unforeseen journeys that will increase your mileage total. Financing allows you to drive as much as you wish.

Car leasing means a lower monthly payment as compared with financing a car. Why is this so? When you lease a car, instead of paying for the entire value of the vehicle - as one does when financing - you are only responsible for its usage during your determined contract period. With financing, you are essentially paying for the vehicle's total value over time, along with interest. It means that your monthly payments will be higher.

You are responsible for damages to the leased vehicle under your lease term, which could include dents, scratches, and even wear and tear on the tires. You may have to pay a fee if you return the car with significant damage.

Approval for a car lease is generally easier than getting approved for financing. You can apply online, and it’s not necessary to have an excellent credit score. You only need proof that you earn enough to pay the monthly payments!

If you finance a car, you have the option to sell it or trade it in at any time. With a leased car, however, you will need to wait until your lease term is up before you can get rid of the vehicle.

When you’re financing, if the interest rates decrease or your credit score improves, you may refinance your loan to negotiate for a lower mark rate reducing your monthly installment.

Investment potential is the last factor to consider. When you finance a car, you build equity in the vehicle as you make payments. You can eventually sell the car for more than what you owe on the loan, giving you a return on your investment. With a lease, you don't own the vehicle and will not make any money off it if its market value increases.

Which option is your best fit? It depends on your requirements and preferences. Financing may be a viable alternative if you want to buy the car outright and want to enjoy more flexibility in terms of modifications and mileage.

If you would rather pay less monthly and don't plan on keeping the car long-term, then leasing could be a more favorable option.

Do your homework and search for the best deals for whatever you decide. Here’s another great article about car financing and leasing. Remember that there is no right or wrong answer when choosing between financing and leasing a vehicle. It all depends on your requirements and circumstances. So be cautious while deciding.

Planning to buy a car soon? Explore the benefits of purchasing a certified pre-owned!

Need a Car with Financing Options in Pearlington, MS? No Problem!

Are you looking for a new car? Supreme Nissan of Slidell, serving Pearlington, MS, has everything you need to make your automotive search easy. From our fantastic selection and high-quality vehicles, we're confident you’ll find a set of wheels you’ll love!

Don’t worry about payments! Our Nissan Auto Loan option is there to make the car more affordable. Apply today online or call ahead so our expert staff can help you find your ideal ride.