When it comes to getting your first car, the possibilities are quite endless. With so many different models, options, and colors to choose from, it can be hard to decide on which car is best for you. One question that many first time car buyers have is whether or not they should lease or buy their first car.
When you lease a car, you are paying to “borrow” it from the dealership. The dealership and you will sit down and decide on a lease term (how long the lease will be) and when the car is to be returned. A lease payment is designed to pay for the cost of depreciation along with interest charges and financing charges.
Typically, monthly payments on a leased car are less than financing a brand new one. Car shoppers also need not worry about a down payment for a leased car. The benefit of a lease is mainly the lower monthly payments. When you lease, you also receive a brand new vehicle.
Leasing sounds like a great choice, but there are some drawbacks. Leasing a car requires a healthy credit score. You are also limited on how many miles you can drive. Although dealerships know cars will go through standard wear and tear, you will be required to pay for any excessive damage to the car.
Financing a Car
When you finance a car, you make payments on the car until you own it outright. Your lender will own the car until the loan has been fully paid off. Once the loan is paid off, the vehicle title is transferred to your name and the car is yours. You will be responsible for all maintenance and repair costs.
When you finance a car, you’ll never have to worry about any basic wear and tear charges on the car. When you finance a vehicle, you are able to choose where you get it repaired and when. Once you pay off the loan, you will own the vehicle. However, payments for financing a car tend to be larger than a lease.
If you’re looking to lease a car, getting approved with a less than ideal credit score can be near impossible. Financing a vehicle is also a great way of boosting your credit score rapidly. If you are looking to buy a new car but are in need of financing, CrediReady can help. Our nationwide network of trusted dealers and verified lenders work with buyers in all credit situations. Take a moment to fill out our free no-obligation loan inquiry form and start shopping for your dream car today!