If you’re thinking about upgrading to a newer pre-owned vehicle, then you must take your payment options into consideration.
Not everyone has the money to pay for a vehicle with just cash alone. Most people need to get financing… or they need to lease a vehicle.
… but not everybody’s situation is the same. And there are several factors that will determine if you should in fact lease or finance your next vehicle.
In this article, we will point out some key indicators that will show you when to get financing, leasing… or when you should buy with cash.
Plus… we’ll show you how to get financing the RIGHT way, so that you don’t end up burning a hefty hole in your bank account… even if you have a less-than-perfect credit.
So you’ve found the right car for you and your budget. Now it’s time to find the BEST way to pay for it. As you already know, most people finance their cars, some lease and very few ever pay cash.
One thing you MUST keep in mind is that each method has advantages and disadvantages, but choosing the right way to pay for your car depends on 4 key factors:
- What type of car you’re getting (sports, family… or utility).
- How long you want to own it for.
- How much cash you have to spare.
- Your credit score.
Paying With Cash
Using cash eliminates your interest payments and finance fees… which… can cost you thousands of dollars on your vehicle purchase.
… but when you pay with cash, you won’t have to worry about any monthly payments.
Paying with cash makes it easier to sell your vehicle, too. Because you can basically sell it whenever you want to.
When you get a car loan, the banks have ownership over the vehicle… which… can complicate the selling process if you want to get a different vehicle within your loan period.
Paying with cash will give you more room to work with on your monthly budget.
… but that doesn’t mean paying with cash doesn’t come with some downsides.
If you pay with cash, you’re going to take a large sum of money out of your savings. And as your car ages, its value decreases. So that means it’s not a very wise investment.
Plus… if there’s any parts that need to be repaired, it’s going to cost you money out of pocket… instead of getting it fixed through a dealership’s warranty.
Are you somebody that doesn’t like driving the same vehicle for more than 5 years? Do you like to switch it up every few years? If so, then leasing may be the best option for you.
Leasing is sort of like paying rent. You don’t own the vehicle, you’re just borrowing it.
… but that doesn’t mean you can get rid of it whenever you want. There’s a set time period that you will hold the car for. After that expires, then you will no longer be able to drive the vehicle.
Leasing is available through banks, credit unions, finance companies and manufacturers themselves.
With a lease, you will be covered under a warranty. So if there’s any mechanical problems, you will be covered.
Monthly lease payments are typically cheaper than if you were to buy a car outright.
Plus… if you’re leasing a vehicle and using it for business, you can deduct the payments from your taxes. Of course, you should always check with your accountant before doing so.
Another upside of using a lease is that you won’t have to place a down payment. Whereas with traditional financing, you usually need to place a 10-15% down payment before driving it off the dealer’s lot.
… but on the downside, you won’t have any equity left once your term expires.
And if you like your vehicle, buying it outright is going to cost you a LOT of money.
For many leases, the term only covers between 10,000 miles and 15,000 miles annually. If you go over these mileage ranges, it can put a heavy dent in your wallet in fees.
So if you’re planning on driving your vehicle over 10,000-15,000 miles each year, then using a lease does not make much sense.
Another major downside is that lessee’s will usually require that you have more than the average, run-of-the-mill car insurance packages.
They usually want you to have a more advanced policy.
Lease payments usually allow for basic wear-and-tear. But if there’s excessive scrapes and scratches, then you will have to pay for the repairs yourself.
If you don’t do so before the lease expires… you will get heavy penalties. Also, if you’re the type of person that likes fancy car modifications, then leasing isn’t a good option for you.
Why? Well… most leases forbid any sort of vehicle modification.
Most Americans choose this option – financing. As with leasing, you can get financing through credit bureau’s, the banks, dealerships… and even manufacturers themselves.
The great thing about financing is that you’re not spending any money out of your own pocket. You’re borrowing somebody elses money to pay off the vehicle.
And unlike a lease, once you make all of the payments, you own the vehicle for good.
The only problem is the availability of attractive loans usually depends on your credit rating. The better your score, the better your chances are of getting the best financing terms from a lender.
If you score is below 600, then it may be hard to even find a loan at all.
… but we’re going to reveal a way that you can get 100% financing on your next vehicle… even if you have a less-than-perfect credit.
The only problem with financing is that it usually costs more per month in payments than leasing does.
… but at Direct Auto Mall in Framingham, Massachusetts, we give out extended periods of up to 72 months!
So what does this mean for you? Well, it means that you will get lower monthly finance payments… and interest rates as low as 1%.
… which is, of course, subject to approval.
BUT – we have a 99% financing success rate. And, we give financing to ANY credit score.
That means if you have a bad credit, good credit… or even NO credit at all…
We will give you our best financing packages possible.
And once you’re done making your payments over that fixed time period (usually 72 months), you get to keep your vehicle.
Any car purchase is a big investment… and we want to help ease the process for you.
To apply for a financing approval, all you have to do is give us a call at 844-213-1232 and answer a few questions. It will take you less than 5 minutes to complete… and… less than 24 hours for us to provide you with your approval.