Which Auto Finance Option is Better: Lease vs. Buy
When it comes to acquiring a vehicle through financing, you generally have two different options: auto lease vs. auto loan. Choosing whether to lease or purchase a vehicle is a big decision with relatively large implications.
However, the experts at Ed Voyles Chrysler Dodge Jeep RAM are here to help. We offer decades of experience and will help you understand the impacts of an auto loan vs. auto lease based on your unique and individual situation. Continue reading to learn more information about an auto loan vs. auto lease.
What Is an Auto Loan at Ed Voyles Chrysler Dodge Jeep RAM
When you purchase a vehicle with an auto loan, you will pay for the entire vehicle cost, regardless of how many miles you drive or how long you keep it. With an auto loan, you may or may not be required to make a down payment and will pay an interest rate based on your credit score. You typically will make your first auto loan payment the month after you sign the contract. Later on you can decide to trade the vehicle in or sell it.
What Is an Auto Lease at Ed Voyles CDJR in Marietta?
In contrast to an auto loan, an auto lease only requires you to pay for the portion of the vehicle you use during the time you are driving it. This is one of the key reasons auto lease payments are typically lower than that of an auto loan. However, it's important to understand that an auto lease is a type of financing and is not the same as renting.
Instead of paying an interest rate, you pay what is called the money factor of financial rate with auto leases. The money factor is very similar to an interest rate. Depending on other factors, you may also be required to pay a security deposit and fees, which are not required with auto loans.
While you will make your first payment the following month with an auto loan, you will make your first payment at the day of signing with a lease. When the lease ends, you can either purchase the vehicle for its depreciated resale value or turn it in. Based on the wear and tear of the vehicle, you may be charged excessive wear and tear or excessive mileage fees.
Key Questions to Ask about Auto Loan vs Auto Lease in Cobb County
In general, it's not possible to say one is better than the other because the answer should depend on your specific lifestyle and situation. To get started, ask yourself the following questions:
- Do you like driving a new vehicle every two or three years?
- Are you concerned with major repair risk or long term costs?
- Are you interested in having lower monthly payments?
- Do you enjoy having the newest and latest features on your vehicle?
If you answered yes to any of the questions above, you may be a great candidate for an auto lease. In contrast, people who are the optimum candidates for automotive loans will answer yes to one or all of the following questions:
- Is building vehicle ownership an important value to you?
- Do you want to pay your vehicle off and be debt-free?
- Are you comfortable with higher monthly payments?
In the end, deciding between an auto lease vs. auto loan is not exactly cut and dry. There are always trade-offs, minuses, pluses, pros, and cons you should consider.
Contact Ed Voyles Chrysler Dodge Jeep RAM
Serving Marietta, Smyrna, Atlanta, Kennesaw, Woodstock, Acworth, Powder Springs, and Surrounding Areas
Whether you're from Kennesaw, Acworth, Smyrna, Marietta, Woodstock, Powder Springs, or any other area, Ed Voyles Chrysler Dodge Jeep RAM is your premier automotive dealership. We offer a large and robust inventory of new and used vehicles. Most importantly, we will help you make the most intelligent and financially sound decision based on your needs.