Jason Pilger Hyundai Can Help You Decide Between Financing with a Car Loan or a Lease Agreement
Shopping for a new car can be exciting. It's fun to consider the possibilities and imagine yourself behind the wheel of something different. Unfortunately, there's more to buying a car than just picking out the one you like best. Most drivers will need to explore financing options to afford the vehicles they're interested in. While that's a common situation, it still leaves a big question for you when you're picking your next car. Should you pursue a car loan or a lease agreement?
The Pros and Con of Buying Your Car with a Loan
Many drivers opt to buy their vehicles with a car loan, and it's not hard to understand why. There are some definite pros to that option. Most centrally, the car is fully yours. You own it, and you can do whatever you like with it. You can drive it for twenty years, sell it to a friend, or trade it in to buy something new. Better yet, once your loan's paid off, you'll be able to enjoy all the benefits of a car without the burden of a monthly car payment. Paying off a car payment can also be a major boon to your credit score.
Car loans do have one big negative that can be hard to overlook, however, especially for drivers working with more limited budgets. The monthly payment for a car loan can be significantly higher than it would be in a leasing situation. That payment can be reduced if you have more money to put down at the time of your purchase, but you can expect to pay more upfront, overall.
The Pros and Cons of Choosing to Lease Your Vehicle
Drivers with tighter budgets might enjoy the benefits of leasing. When you lease, you essentially agree to rent the car of your choice for a fixed long-term period. To be sure, there are some downsides to this. You don't get to keep the car at the end of your lease, and you'll also have to pay for any excessive damage it incurs during the time it's in your possession. You'll also have to adhere to restrictions like annual mileage caps.
On the other side of things, however, there are also some big benefits that can make those restrictions worth it. Even with no money down, the monthly payment for a leased car can be significantly lower than it would be if you'd invested in a loan. That lower payment can make it possible for drivers to afford a better car than they would otherwise. The more temporary nature of lease agreements also make it easier for drivers to upgrade at regular intervals, if that's their preference.
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