Posts Tagged ‘car loans’
Before you can choose an option we have to understand what each option is.
Financing: With a finance agreement you pay a monthly or bi-weekly amount until the loan you used to originally pay for the car is paid off.
According to Edmunds, the majority of people choose a 72-month term to pay off the loan. You can pick a term as long as 84 months and as short as 36 months. The shorter the term the quicker you own 100 percent equity in your vehicle.
Leasing: A Lease agreement still has you make monthly or bi-weekly payments on a shorter fixed term. You then return the vehicle when that term is over. You are basically only paying for the car’s value you used because of this lease payments are often cheaper.
People typically do a three-year lease but can go as long as 60 months and as short as 24 months. Payments are based on the residual value, basically what the car will be worth at the end of the lease.
So which is better?
To be honest that depends on you and your needs.
If you are looking for lower payments and having the newest models with the latest features then leasing may be your choice.
If owning a vehicle and not being limited to the number of kilometers you can drive per year are a part of your needs then financing may be your choice.
Research is always key in helping you figure out your needs including speaking with your salesperson. At Ken Knapp Ford our salespeople will always take the time to help figure out what option is best for you.