When it comes to buying a car it often means choosing between leasing and auto loans, but it's not always necessary. Even if you have credit problems both of these are great methods to use to buy a new or used car with poor credit today.
Some people may like the benefits from a lease, while others may prefer traditional car loans. That is why we want to make sure that car lease versus auto loan argument is properly conducted. This way car buyers can get the best lending opportunity.
Leasing vs Auto Loans: Benefits of Financing
A large majority of car buyers take the route of auto financing loans when shopping for a vehcile for a number of different reasons. One of the most popular is accessibility. Almost any dealership, website, or financial institute is willing to extend a loan agreement to a consumer who need help buying a new or used automobile. Most people can also look forward to:
- Being able to own your vehicle
- Having a lower insurance premium
- Improving their credit when making payments
- Cheaper up-front costs
If these are some of the benefits you are looking for when shopping for a car it is obvious that you should apply for a car loan today. It doesn't even matter if you have good, bad, or no credit in most cases. However, there are some disadvantages that people should be aware of before filling our an application.
Leasing vs Auto Loans: Benefits of a Lease
Whether you believe it or not, the people that get a lease are a diferent group of buyers. These individuals are typically looking to make small monthly payments on a short term agreement. Therefore, the lease terms will be anywhere between 2 to 4 years and has it's payments determined by the overall depreciation that occurs during the term. Other benefits include the following:
- Receiving a low monthly payment
- Having the option to lease another vehicle
- Possessing the ability to purchase the car for residual value
The decision to undertake a lease is one that provides a number of great qualities to people who do not want to be locked into one vehicle year-after-year. Unfortunatley, like the decision to finance a car, people can also find some not so pleasent benefits to auto leasing market as well.
Disadvantages of Financing and Leasing
Finding a lender that offers car financing is easy, but not the same as locating a finance company that can handle your specific credit situation. A person's credit and financial status will often times play a huge role in auto loan approval for people. Certain lenders, like banks and credit unions want to see that you have an above average credit rating, while other places are willing to accept individiuals with poor credit scores.
Much like the financing route a person's credit and financial stability is often questioned when trying to obtain a lease, but often at a more extreme level. Dealers expect buyers to pay large up-front fees, and it's also more difficult to escape a lease due to termination fees. More importantly, leasing can be an ongoing circle if you do not decide to purchase your vehicle, as you would have to continue to lease a new car every 2 to 4 years.
Which Car Buying Method is Better?
It is very difficult to say that one car buying method is superior to another, as they are solely based up your financial status. However, it is much more likely that the finance option will fit anyone regardless of their financial or credit status.
