- Posted by Sanderson Lincoln
- On November 30, 2016
Getting a new car can be very exciting. Trying to figure out how exactly you should pay for it isn’t quite as much fun. At least it isn’t for your average car buyer looking to make the right financial decision.
Figuring out whether you should lease or finance a vehicle can be a little bit tricky, but it shouldn’t stop you from making the right choice. Keep reading to determine whether you should finance or lease a vehicle.
New or Used?
If you have your heart set on a brand new car, you generally have the option of leasing or financing. That isn’t the case if you’re looking to save money and get a used car instead.
For the most part, lenders won’t lease used cars. That leaves financing as your only option. If you want a quality used car though, you’ll likely still save money in the long run with this decision.
Do You Have a Down Payment?
If you’re considering financing a vehicle that you will own once you’ve completed your payments, you’ll likely need a considerable down payment on your car. In some cases, a down payment can be as much as 30% to 50% depending on who you want to buy the car from.
For some people, a down payment is no big deal. For others though, having to put down thousands of dollars at once just to drive the car away isn’t possible. Consider your budget and whether or not you can come up with a lump sum down payment without putting too much stress on your finances.
If you really want to finance a car, but don’t have a large down payment, take your time looking for the right vehicle. There are sellers out there who will sell you a car for less than 30% down, but they can be hard to find in some markets.
Monthly Cash Flow
A lot of people don’t have a ton of cash in the bank for a down payment on a used car. If you have enough cash coming in each month though, leasing a vehicle can be a way to get a car you enjoy right now.
With a lease, you generally don’t have a large down payment. This can make leasing more economical for people with higher monthly incomes.
People that put more than 10,000 miles per year on average on their vehicles aren’t always ideal candidates for leasing. That’s because most lease agreements include a set mileage that you can’t go over without paying extra.
In many cases, charges for mileage can be considerable. At 50 cents per mile, you don’t have to go far to rack up a big bill that you’ll have to pay when you turn your leased car back in to the dealer.
Contact Sanderson Lincoln to learn more about whether you should lease or finance your next vehicle. Sanderson Lincoln can also help you find the right car to match your budget and driving needs. Visit us today!