We will further analyze the benefits of each type of car finance option. The car finance option you choose depends on the importance you give to owning a new car. The car finance deal that you are going to make starts when the salesperson asks you what kind of car finance option you want to use. Your answer can be one of the following: buy the car, lease the car or pay cash for the car.
This car finance option usually is a 36-60 month endeavor. The longer the time the lower the payments will be. The amount of money you pay for this car finance option depends on your interest rate, down payment and total sum of loan. This car finance deal is based on the fact that, until you pay for the vehicle, the lending institution will own the car. There are some important aspects about car leasing that make it attractive to customers, such as: low monthly payments, low down payments and low maintenance costs. The monthly payments are kept at a low level, lower than buying car with an auto loan. Another benefit of this car finance option is that the car will have a 3 year warranty and will be covered for mechanical failure during this period. You will have car payments until the entire sum of the car is paid. The conclusion is that this car finance option (using the leasing method) is more expensive on a long term. If you are interested in leasing, this car finance option has some variations. All auto leases allow you to drive the car for a limited number of miles per year. The contract will contain a residual price for the car, which you will pay at the end of the lease as the car passes into your possession. Be careful because this is the riskiest car finance deal of them all!
If you decide to pay cash for the car the transaction everything will be very simple. This is the most favorable car finance deal if your income can support such a large transaction. Negotiating with the dealer will most likely make this car finance option even more attractive. Choose wisely as every car finance offer has its own ups and downs, and every car finance company will try to persuade you into taking their option into account.
When buying a car, a lot of money is involved. Depending on the budget you are willing to spend there will be a car finance option to your liking.