Whether your buying new cars or used, there is a 95% chance that you will be financing the vehicle. As a consumer, you have several financing options including the auto manufacturer, bank loans and a personal line of credit conversely leasing options offered through the manufacturers are often very aggressive and provide cheaper payments than regular loans.
Before making your decision between purchase-financing or leasing a car, we recommend that you take into account the following information:
- Interest rates
- Monthly terms
- Cash incentives/manufactures rebates
- Credit requirements
- Early buyout or termination options
Another key factor to consider is whether you will keep the vehicle for a short or long-term period. If your intention is to keep the vehicle for the long-run (in excess of 7+ years), buying will be a smart choice; allowing you to take advantage of all the loan products offered. Long term ownership and purchasing the car as a result makes the most sense rather than leasing the vehicle and then exercising the buy-back after 4 years; and then re-financing the buy-back which subsequently turns out to be a very expensive venture and transaction. The re-financing of a lease buyback is usually transacted through the customer’s bank without any manufacturer’s interest rate support; this is often far more expensive than using a subsidized interest rate from the onset and financing the vehicle over 60 or 72 months. The other benefit of buying from the onset rather than leasing and exercising the buyout is you would not have to incur some of the fees associated with buy-backs such as dealer administration fees, safety certificate fees (which could include some hefty maintenance costs that could have waited if you owned the car) and licensing costs.
If you are a shorter term vehicle owner (under 6 years) leasing is the only solution. It provides you with a set vehicle cost and you do not have to worry about the trade in value of the vehicle because you will not have to trade in the vehicle when the lease is over; you simply hand the vehicle back to the dealership and start again. In the long run, a perpetual lease payment is actually cheaper than owning an old car but other factors must be entered into the equation. In the end, vehicle leasing allows customers to drive an almost new car at all times without having to engage in significant maintenance bills or repair the car when it starts to break.
For more information on these options, visit our vehicle experts website at LeaseBusters.com; they know what the best options are for customers and will even help you get out of your current lease to buy or lease a new car (if that’s what you are looking to do). Or if you are looking to upgrade your car, consider taking over a lease or a finance contract through LeaseBusters.com or FinanceBusters.com.