This February, we’re gathering our best tips and tricks for buying used cars.
Another common question we get from our customers is: should I lease or finance? While the answer to that question is different for everyone, here are a few things to consider if you’re grappling with that question.
In the second of this two-part series, we’ll dive into the leasing vs financing debate and the items you should consider when deciding between the two:
What Is Financing?
Purchasing cars, rather than leasing them, is still the most popular way that Americans acquire vehicles. When you purchase a car, you pay the entire negotiated price of the vehicle using cash, financing, the value of a trade-in, or a combination of all three.
Financing a vehicle involves getting a car loan from a lender such as a bank, credit union, or finance company. You pay down the amount of the loan (also known as the principal balance) and the interest in a series of equal monthly loan payments. The length of an auto loan is called its term. Loan terms can vary from a justfew years to seven, or even eight, years.
If you’re buying a new car and plan to have it for a long time, making that investment usually involves a down payment, your trade-in, and an auto loan. The lender holds the title until you pay off the loan and any fees– once you’re all paid, you own the vehicle and take possession of its title.
Which one is right for me?
When it comes to leasing versus financing, there is no right answer. It’s largely dependent on the buyer’s individual preferences and the specific vehicle in question. Buyers should consider their budget, their future plans, their tolerance for maintenance, their typical monthly mileage, the condition and logevity of the vehicle, along with the terms of each contract, and weigh the opportunity costs of each option. When in doubt, ask for a second opinion– get a quote from another dealership or two and compare terms, talk to a lawyer, consult with an accountant. And, as always, be sure to be sure to ask a lot of questions before you sign the paperwork or cut a check so you know exactly what you’re signing up for.
V&F Auto Sales has been serving the Western Mass community since 1988. We strive to provide our customers with top quality, affordable vehicle inventory and convenient financing options so you can get the car you love– without breaking the bank. View a complete list of our inventory on our website, or visit us at 7 Harding St, Agawam, MA 01001.