So, you have finally found the perfect car, now it is time to choose how you want to pay for it. Most people elect to finance their cars; some people lease them, whilst others choose to pay for their cars outright.
Each type of payment has good sides and downsides to it, but the type of payment you choose will ultimately depend on your financial situation.
Paying with cash
Whilst paying for a car in full is somewhat rare, if you can afford to do so it will save you money in the long run. By paying in full, you will get rid of any interest fees and finance costs that come with leasing or financing your vehicle. You may not realise it, but financing a car, can add thousands to the price.
If you choose to buy your new car with cash, you will own it outright and can do whatever you want with it. If you get bored and want an upgrade, you can sell it and make your money back or trade it in for a newer model. For some excellent new cars in Bentonville AR, you can have a look online.
Buying your car outright can make it much easier if you want to sell your car in the future. If you buy your car on finance, technically the bank owns your car. This can make selling the car and upgrading a little tricky.
Whilst paying in full means you will have no monthly fees to pay out for, by paying for your car in one go, you may use up a large amount of your savings. This could lead to you ending up in financial trouble, so before buying a car outright, make sure you can afford to do so.
If you like to get a new car every year or two, leasing may just be the perfect option for you. While only around 20% of people lease their cars, it can be a good choice to make. Leasing a car is just like renting a flat – paying monthly rental rates give you the right to drive the car, just like paying rent allows you live in your home. However, car leases have a set period, so you may only be able to have the car for six months, for example.
One of the upsides to leasing your car is that the company you hire it from will take care of any maintenance issues or mechanical problems. Just like a landlord takes care of his property.
Leasing a car is much cheaper than buying a car outright, with payments made each month. One of the best things about leasing a vehicle instead of buying one is that as soon as you are done with the car, you can just return it and choose an upgrade.
Financing your car
Most drivers pay for their cars through financing, by making payments each month to the company. The best thing about choosing to finance your car, instead of buying it outright, is that you are paying for it with the banks money and paying it off slowly and affordably. Unlike a car lease, once you have made all your payments, you then own the vehicle.
If you choose to finance your new car, it is a good idea to find a deal that has the lowest interest rates on it. If you do your research and look hard enough, it is possible to pay only a little more than you would have done if you had paid in cash.
It is worth noting that your ability to get finance on a car will depend on your credit score and credit rating.
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