Leasing Or Financing: How To Get A Car?

September 28th, 2022 by

Leasing Or Financing: How To Get A Car?

Key Takeaways:

  • Car-related question is a big decision and one that should not be taken lightly.
  • There are pros and cons to both leasing and financing, so be sure to do your research before making a decision.
  • There are a few items to remember when negotiating a car lease or loan, such as monthly payments and interest rates.
  • Be sure to ask the dealership about any special offers or deals that may be available to you.

Are you unsure of the difference between leasing and financing a car? You’re not alone. Many people don’t know the specifics of each option, making it challenging to decide what’s best for you. In this free guide, we’ll break down the pros and cons of both options so that you can make a well-informed decision when deciding on your next car. Whether you’re in Lithia Springs or anywhere else in the Atlanta area, we can help!

What is leasing Vs. financing a car?

The process of buying a car through a car loan is what we call car financing. You are involved in a car loan agreement where the vehicle serves as collateral for the loan. You make monthly repayments to the lender and own the car outright at the end of the loan period.

Leasing a car is different from car financing because you never own the vehicle. The process is similar to renting or a contract when you lease a car. You have to make monthly payments to the leasing company for vehicle use with car leasing. However, you must turn in the vehicle to the company as your car lease ends.

What is leasing Vs. financing a car?

How to lease a car?

1. Research the car you want to lease.

You will be stuck with the car for at least two years, so make sure it’s a car you can see yourself driving for a while. Consider the make, model, and features of the car.

2. Find out the residual value of the car.

The residual value is what the car will be worth at the end of the lease. This value can affect your monthly payments. A car lease is a good deal if the vehicle has a high residual value.

3. Get quotes from different leasing companies.

Just like with car loans, you should shop around for the best deal on a car lease. Compare various companies’ interest rates and monthly payments to get the best deal.

4. Choose a lease term.

Lease terms can range between two or three years. However, some leasing companies will allow you to choose a shorter lease term. It would help if you remembered that car lease term length could affect the money you pay, so be careful about every step.

5. Put money down.

You will have to put money down on the car when you lease it. This is called a security deposit or capitalized cost reduction. If you decide to submit the deposit, you may be able to negotiate a lower monthly payment.

6. Pay attention to mileage limits.

Most leases come with mileage limits, usually between 10,000 and 15,000 miles per year. Going over the limit means paying an additional fee per mile. You can negotiate a higher mileage limit when you sign the lease. Still, it will likely result in a higher monthly payment.

7. Understand the fees.

Some fees are associated with a car lease, including acquisition, disposition, and early termination fees. Ask yourself if you can afford these fees before signing a lease.

8. Consider insurance costs.

When you lease a car, you will be required to carry comprehensive and collision insurance. Companies make these insurances a necessity since you do not own the car. These policies can be expensive, so factor them into your budget when considering a car lease.

How to finance a car?

1. Research the car you want to finance.

You will be stuck with the car for at least four years, so make sure it’s a car you can see yourself driving for a while. Consider the make, model, and features of the car.

2. Find out the interest rate for an auto loan.

Your credit score will determine the interest rate. You must vary car dealerships trying to jack up the interest rate. The more you know about car financing, the better equipped you will be to get the best deal.

3. Know your budget and limits

In addition to the car payments, you will also have to pay for gas, insurance, and maintenance. So as you accumulate the price of your new car, remember these several expenses so you don’t find yourself in a financial hole.

4. Get pre-approved for a loan.

Once you know which car you can afford, it’s time to start shopping for a loan. Dealerships in Lithia Springs, GA, can offer you financing, but options are always good.

5. Negotiate the price of the car.

The dealer will probably give you a higher interest rate if you finance through them, so it’s always smart to negotiate the price of the car first.

6. Get the car inspected by a mechanic.

Let’s assume you have completed all the previous steps and now have the car you want. The last step requires you to get it inspected by a mechanic you trust to find no hidden surprises. Doing so is necessary, especially if you’re buying a pre-owned car.

7. Get car insurance.

You’re almost there! The final step is to get car insurance for your new car. Once you have car insurance, you’re all set to hit the open road. A car is a big purchase, but it doesn’t have to be stressful. If you take your time and do your research, you’ll be driving your dream car in no time.

8. Congratulations!

You did it! You now know how to lease or finance a car without breaking the bank. With this knowledge, you can car shop with confidence.

Ending Note:

For all the car owners in Lithia Springs, GA, we hope this guide was helpful in making the decision of whether to lease or finance your car. Whichever course you take, we wish you the best of luck!

If you want nothing but the best in your car buying experience, trust Matt Calavan CDJR, serving Lithia Springs. GA. You should trust us because:

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