If you’d love nothing more than a new set of wheels, there are a few ways to achieve that dream. One popular option, according to Cartelligent: “Around one-fifth (20%) of all new cars in the United States were leased in 2022.” Certain high-end vehicles are even more likely to be leased than purchased. Which path makes most sense to take may depend on a host of factors:

  • Your budget
  • Driving habits
  • Ability to get a loan
  • Financial history
  • How long you’ll use the vehicle

To make an informed decision that’s in your best interest, first educate yourself about the main differences between leasing and purchasing a vehicle today.

What Does It Mean to Lease a Car?

Leasing a car still provides you with a vehicle that is new to you – just with an alternative form of financing it. This option is typically made for a predetermined period of time. Like renting, you make monthly payments until the end of your lease, at which point you are expected to return the vehicle. If you’re in town for six months and need a car to get to work, then leasing might make more sense. The monthly payments you will owe will likely be less than if you purchase the vehicle.

However, when you lease a car, you need to consider a few details in the contact. You’ll want to make sure you’re getting the best deal possible, particularly if there’s a chance you might purchase it eventually:

  • How much the value will depreciate
  • Interest you will owe over time
  • Taxes included in payments

One benefit to leasing you may not have considered: you won’t have to sell it someday. Cars are. They break down. Eventually, car owners need to figure out what to do with their aging vehicles. That’s why if you know your driving needs are limited, leasing might be a more practical and attractive option.

What Happens When You Buy a Vehicle?

The main limitation of leasing is that it doesn’t give you ownership over your vehicle. Buying the car outright gives you full ownership from day one. If you don’t want a company having any say over what you do with the vehicle – and you have the means to pay for it – this might be a better option. You can drive it whenever and wherever you want with no restrictions. This option is good for people who plan to use the car for a long time, as opposed to someone with temporary needs.

Prepare to make a bigger upfront deposit than with a leased vehicle. Most folks apply for a loan to finance their new vehicle, which can be done online or in person. A few things you may need to finance your purchase:

1. Your Credit Score

Do you know your credit score? A low score will be necessary to secure a favorable loan.

2. Interest Rates

The interest rate will compound what you owe each month, so the lower the interest rate the better. Do some research to find out what interest rates are available on your vehicle for people in your credit score range to get a sense of what rates you might be offered.

3. Short-Term vs Long-Term Loans

Other terms will include how much time you will need to pay off the loan, and how often you will make payments. Take time to weigh your options so you know you’re choosing the best financing deal for your financial circumstances.

In other words, whether buying or leasing, some math should be involved in any decision. That’s why it’s so important to find out what terms and conditions you’re willing to accept beforehand. Lease-to-buy is yet another option. Either way, make calculations based on various factors, including monthly auto insurance payments and auto maintenance costs, both of which will boost the overall price of vehicle ownership.

Title, Plates & Registration at CFSC Auto Services Throughout Midwest

At CFSC Auto Services throughout the Midwest, we manage a whole array of needs for drivers and their vehicles. When you need stickers, plates, or to transfer ownership, we’ll take care of the paperwork for you and make sure everything is handled properly from day one.

Stop by at your convenience and find out about the many financial services we also provide. Check out CFSC Auto Services today!