Deciding whether you should finance or lease your next (or first) car
can be tough, but there’s a big difference between the two. While
vehicle financing typically involves making higher monthly payments,
you’re paying to own it. On the flipside, while leasing may have lower
monthly payments, at the end of the lease term you give the vehicle
back and have nothing to show for all your payments.
You own the vehicle.
Monthly payments are typically higher because you are paying off
the entire purchase price of the vehicle (plus interest, taxes and fees).
You can sell or trade in your vehicle at any time.
You’re free to drive as many miles as you like.
You don’t have to worry about wear and tear, although it could
lower the vehicle’s trade-in or resale value.
There are no further payments at the end of the loan or financing
term and you may have built equity that can go towards the purchase
of your next car.
You don’t own the vehicle.
Lease payments are typically lower because you’re paying only for
the vehicle’s depreciation during the lease term (plus interest,
taxes and fees).
If you end the lease early, early termination charges can be as
costly as the contract itself.
You can drive as many miles as you like; however, you will likely
have to pay fees for miles in excess of the original millage limit
of the lease.
Most leases hold you responsible and you’ll have to pay extra
charges for what the lease deems excessive wear and tear.
At the end of the lease (usually two to three years), you can
finance the purchase of the car, or lease or buy another.
If you’ve decided to go the auto financing route but have bad credit
or no credit established, subprime auto lenders or financing
companies, like Credit Acceptance, can help you get approved for your
next car. Just
fill out this brief form to get connected with a dealer enrolled
in the Credit Acceptance program near you who can help you find your
credit approval today!