One of the big decisions to make when getting a new car is whether to lease the car or finance the sale. Here’s an overview of details that can help you make that decision.
Is Leasing Right For You?
When you lease a car, you’re paying for the right to use it for a predetermined amount of miles and time. In most cases, the monthly payments on a lease will be lower than monthly finance payments on the same car. With a lease, you’re basically paying for the car’s expected depreciation (loss of value) during the lease period, plus a rent charge, fees, and taxes. At the end of the lease term, you have to return the car unless the lease agreement allows you to buy it.
Before leasing a car consider the following factors:
- Estimate how much you will drive. The yearly distance limit in most standard leases is 15,000 miles. You can ask for a higher limit but that will probably raise the monthly payment because the car will lose more of its value during the term of your lease. If you go past the yearly mileage limit, you’ll probably need to pay an additional fee when you return the car to the dealership.
- Review all the terms of the lease. With a lease, you’re responsible for any excess damage, wear and tear or missing equipment. You will also be required to service the car according to the manufacturer’s recommendations and keep an insurance policy that meets the leasing company’s standards. If you decide to end the lease early, you may need to pay a substantial early termination charge.
Is Financing Right For You?
Traditional financing means you and the dealer sign a contract in which you buy a car and agree to pay, over a certain period of time, the amount financed plus a finance charge. The dealer usually sells the contract to a bank, credit union or finance company that services the account and receives your payments.
Benefits of dealership financing may include:
- Special sales offers. Dealers often offer manufacturer-sponsored, low-rate, or incentive programs. These offers may be limited to certain models or have special requirements, like a bigger down payment or shorter length of the contract. They also may require a certain credit score for qualification.
- Variety of financing options. An auto dealer’s arrangements with various banks and finance companies could mean that it can offer you a range of financing choices.
If you have questions about leasing or financing a car, contact us at Route 9 Nissan in Westborough, MA. You can either stop by our dealership or check out our inventory online. For further assistance, get in touch with our team. You can also reach out to us for the maintenance and repair of your vehicle. Our friendly staff will be by your side throughout your vehicle buying process. Keep reading our blogs for all the updates. We look forward to hearing from you soon!