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Auto Loan Questions
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Auto Loan Tips
Prepare for additional costs
A longer-term loan might not be worth it
Consider refinancing your current car loan
Buying vs. leasing
Determining if you want to buy or lease your new car requires consideration of the number of miles you plan to clock on the vehicle odometer as well as how much you can afford each month.
What leasing is
You likely will find leasing options through dealerships, and it can be a great option if you have your sights set on a specific model. Leasing is worth exploring if you are interested in driving several, more expensive vehicles every few years rather than signing off on just one. Leasing also carries incentives, such as the ability to drive a higher-end vehicle, cash rebates, manufacture warranty and subsidized residual values.
How to decide between buying and leasing
To decide if you should lease or buy your next vehicle you should consider three main factors: the amount you drive, the purpose of the vehicle and how much you can afford to spend. Buying is best if you want full ownership of the vehicle and can afford a higher monthly cost. Leasing is right for you if you appreciate the flexibility in vehicle types and can stick to the mileage restriction.
Just as with buying a vehicle, you will have a monthly payment over the life of your lease. But when it comes to buying there is light at the end of the tunnel in terms of ownership. With leasing, unless you plan for a lease buyout, you will simply have the vehicle for a set time with no sole possession in sight.
Leasing comes with quite a few caveats that can lead to a damaged credit report or money loss. If leasing is the right route for your needs, consider common pitfalls before signing off.