Are you looking to buy a new car but you don’t have the funds available to pay for one outright? There are a number of financial choices you have when looking for a new car. Financing and leasing are two of the main options and they come with numerous pros and cons. Before deciding which is right for you, it is important to understand what each option entails.
Financing – The pros and cons
Financing is widely available and it is one of the most popular choices for those looking to buy a car. The biggest advantage of using finance is the fact you get to own the car outright.
Most dealerships have various financing options available to fit your needs. If you shop around it is possible to find new cars and even used ones at fantastic prices. For example, you can find some excellent deals at Jennings Motor Group.
If you opt for car finance, you typically pay off a set amount each month.
It is worth noting that the car doesn’t actually become yours until you have made the last payment. If you default on any of the payments, you could have the car taken away from you. Therefore you need to be 100% certain that you can afford to make the repayments before you commit to buying.
There are a lot of financing deals out there so you will need to compare your options before choosing the right company to sign up with.
Leasing – The pros and cons
Leasing is an alternative to buying that many people prefer. Rather than owning the vehicle, you are simply hiring it for a set time period.
Like financing, you pay a certain amount each month in order to keep the car. One of the main advantages to leasing is the fact that it can be a lot cheaper than buying. As featured on Go Compare, this isn’t always the case as it will depend upon numerous factors.
One of the main downsides to leasing is the fact that it isn’t your car. At the end of the leasing period you need to return the car in good condition. However, you will typically be offered another car to lease at a discounted price provided your original lease went well.
One of the reasons some people prefer to lease rather than buy is because it enables them to get a new car every few years.
Choosing the right option for you
In order to determine which option is right for you, you will need to take several things into consideration. How many miles will you be driving and what type of car are you thinking of getting? Which? has an excellent guide that shows how leasing compares to buying on some of the most popular models.
As with anything, it is a good idea to do your research before you make any decisions. You need to take your personal circumstances into account before you can truly see whether leasing or financing is the right choice.