When you are looking for a car but cannot afford to buy one outright, you have a few options. It is best not to get bogged down with the possibilities. Instead, do a bit of research and find out what is best for you. There are two main options for getting a new car without buying it brand new. You can either lease a car or finance it. While there are benefits to each, it depends on what you are looking for. What is your intention? Do you want to own the car eventually? Or do you simply need to rent a car for an extended period? You have to think about these questions before you can find out what the best option is for your situation.
Financing
Financing a car is also known as a personal contract purchase (PCP). This provides the opportunity to get you the keys to a brand new car every few years. It is kind of like trying out cars until you can find one that you want to pull the trigger on. At any point, you can choose to pay the lump sum and own the car. This is perhaps the most intriguing element of financing, you get to pay off the car as you go. This provides the peace of mind that you are paying towards something, not just renting the car. Although many people who do this don’t even end up buying the car, it still makes people feel better about it.
Financing: The Process
The first thing you need to before you begin the process of financing a car is to check your credit score. If you have bad credit, you will have a hard time financing a car. It is like any other loan, you need to be in good standing to get a good rate. If your score is high, you will have more options. Before you finance a car, you should make sure that your score is high and that you will be able to secure a good deal.
Next, you want to figure out your budget. When you are financing a car, you want to know how much you will pay each month and overall. The budget is key. You should keep your payments low so that you won’t get overwhelmed with bills. According to the site MoneyPug, a platform used to find the best car finance deals, you will likely be paying interest, and the longer you pay the more you will pay in interest.
Finally, you should do your research and find the best deal for you. Compare the numbers, not just monthly payments, to figure out what is the best choice. You should also learn car-purchasing lingo and what you will need to know to get the best possible deal. If you follow these steps and are looking to own the car at the end of your payments, you will be better off financing than leasing.
Leasing
Leasing, on the other hand, is essentially renting a car for an extended period of time. There are a lot of pros and cons when it comes to leasing. First, leasing is affordable, with fixed monthly payments that can help you get a desirable car. Lower payments than financing make it irresistible for many. Furthermore, car tax, roadside assistance, service, and maintenance can be included.
However, there are a lot of negatives when it comes to leasing. For one, there is no option to own the car. You are renting it. Not every manufacturer offers to lease, making quotes more difficult to get. There are also strict mileage limits, and wear and tear charges will probably apply. It also costs a lot more to cancel. In general, personal contract purchases can undercut lease offers.
Leasing: The Real Benefits
Leasing is less about the process and more about the reason you are wanting to lease. For one, the real benefit is the low monthly cost. If you are trying to get into a new car soon and want low monthly payments, you will be able to do so with a lease. The only thing is that you won’t be able to own the car and will instead pay for the opportunity to rent it over a long period.
Neither are bad options if you know what you are getting into. When you are not looking to buy a car, leasing could be a good option for you. This is especially true when you will move or be in a situation where you won’t need the car. Either way, do your research and find what you really need before you make a decision to lease or finance.
