When the time comes to purchase a new vehicle, you are definitely going to have some decisions to make. Deciding whether to lease or finance is a little bit easier when you consider the following factors.
The Overall Cost
Ultimately, financing a car is going to cost you more money in the end. You are buying the car, so you will have to make monthly payments until the entire cost of the car is paid off. With a lease, you are making payments for a shorter amount of time, and you are not paying the entire price of the car. You can generally make lower down payments with a lease as well.
Speaking of the cost, you also must determine which plan you are more likely to get approved for. Of course, applying for pre-approval can give you a decent idea of the cost. In most cases, getting approved for a lease will be a little bit easier than obtaining approval for financing. Since you do not need to pay as much money overall, the restrictions are usually not as strict.
The Amount of Miles
You own the car when you have a finance agreement. Barring any extenuating circumstances or specific programs, you should not have a limit on the number of miles that you can drive each year. However, with a lease, these limits are common. The limits are usually rather generous, and you can often negotiate for more so that they are not too constricting. Still, if you have a job that requires you to drive many miles on a regular basis, a lease just might not be an option.
How You Use Cars
If you are a person who tends to go through cars in rapid succession, then a lease is probably a better choice for you. Many lease agreements last for 36 months, so at the end of that time period, you will be free to purchase or lease a new vehicle. If you want to hold on to your car until it grows old, choose to finance your car.
Choosing whether to lease or finance your car is definitely a topic that you want to think about. A car is a huge purchase, and a rash decision could lead you down a path that you do not want to go financially.