Buying vs Leasing a Car in North Carolina
Learn More from Washington CDJR!
Shopping for a new car is a bit stressful by nature as there are a lot of decisions for you to make. You must consider what features you want, how much space you need, what color you want, and much more to narrow down your options. Even after you've chosen your car, there is still one more decision you have to make, and it's arguably the most important. You must decide whether you're going to buy or lease the vehicle. There are many advantages to buying and leasing, and knowing what those advantages are will help you decide which is best for you. Here on this page, we'd like to tell you more about both buying and leasing to help you make that decision. Continue reading below to learn more!
Information About Buying a New Car
Buying a car is oftentimes also known as financing. Financing is when you have a financial institution, such as a bank or credit union, pay for the car, and the buyer pays the financial institution back at a monthly rate. Four elements go into an auto loan. The first factor is the total cost of the car, which amounts to how much money the bank will have to lend you to buy the car. Next is the loan term, which is how long the loan will last. Typically, loan terms last from 24 to 60 months, but some loans can go up to as much as 84 months to help lower the monthly payment. The interest rate is the next factor. Your loan's interest rate depends on your credit score and the value of the vehicle. Lastly, and possibly most importantly, is the monthly payment. This is determined by the interest rate and total loan amount. Financing is a popular method of paying for a car, as it gives drivers the ability to service it wherever they like, customize it in any way they like, and put as many miles on it as they need to. Whether you drive 10,000 miles a year or 50,000 miles a year, you don't have to worry about a mileage limit when you finance your car. Additionally, car buyers who finance a car have the choice to purchase Guaranteed Asset Protection, better known as GAP insurance, which covers the remaining cost of the vehicle in the event of a total loss. Once an auto loan is paid off, you will be given the car's title, and it will be yours to keep, free and clear.
New Car Leasing Information
While financing is borrowing money and paying it back over time, leasing is borrowing the car and paying for it each month. The monthly payments for a lease are oftentimes lower than those for a financed vehicle as you're paying for the car's value instead of the total cost of it. Lease agreements usually last between just 12 and 36 months. Most commonly, lease contracts come with a 10,000, 12,000, or 15,000-mile per year limit. Leasing is a great choice for drivers with shorter commutes and those who get a new car craving every couple of years. Leasing a car often requires a smaller down payment than financing, if one is required at all. Additionally, a leased car is automatically given GAP insurance which is rolled into the monthly payment as the car is being borrowed. When a lease contract expires, you can choose to buy out the rest of the car's value by either paying up front or financing the rest of the cost, or you can choose to return it and get into a new lease.
Should I Buy or Lease a New Car?
Now that you know the facts about buying and leasing, it's time to decide which is right for you. The first step to deciding should be taking a close look at your finances. Check to see how much money is coming in and going out each month to determine how much you can comfortably afford to pay monthly. While doing this, also check to see how much you can afford for a down payment, if it is necessary. Before purchasing a new car, you should track your mileage for a month and multiply it by twelve to give you an estimate of how much you drive each year. This will help you in two ways. First, it will help determine if buying or leasing is right for you. And if you choose to lease, it will help you determine which mileage limit best suits your needs. Having all of this information ready when you come to purchase a new car will help streamline your journey to get behind the wheel of your new car.
Buy and Lease at Washington CDJR!
Just because there are a lot of decisions to make doesnt mean that buying a new car has to be stressful. Whether you've decided to lease or buy, the financing team here at Washington Chrysler Dodge Jeep Ram is ready to help you get behind the wheel of your dream car in the most affordable way possible. To find the car you're looking for, browse our expansive inventory right here on our website. If you'd like, you can also visit us in-store at Washington Chrysler Dodge Jeep Ram to take a test drive with a professional sales team member. However you choose to shop, we look forward to seeing you.