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When shopping for a new or used vehicle, it’s an exciting experience that can lead to reliable transportation for everyday usage and other fun benefits, such as traveling for vacation and leisure activities. However, before reaching the milestone, you need to decide if you’re going to lease the vehicle or apply for an auto loan. Each option comes with various benefits and disadvantages, including those mentioned below.
Monetary Benefits
The monthly payments are generally lower when leasing a vehicle, along with money put down on the car. Therefore, some people choose to lease a car until they are ready to increase their payments and buy the car. The warranty protection is also more beneficial for leased vehicles because of the timeframe. Most warranties are valid between three and five years, the same time that individuals tend to contract out their cars. This means that when the warranty expires, it would be time to choose another vehicle and worry less about paying for maintenance and repairs.
An auto loan typically provides multiple options to buyers based on their budgets, credit history, and employment. Those individuals with less than perfect credit have a better chance of being approved for an auto loan than those looking to lease a vehicle. Financial equity is another benefit when buying a car; you will save more money while owning the automobile and boost your credit. Businesses like On-Trac Auto Sales will help you decide the best choice when making this significant investment.
Mileage
When signing an auto loan, the amount of mileage is not monitored as it would be for individuals leasing the car. The limits often vary, but most dealers place the restrictions between 10 and 15 thousand miles. While you can go over those amounts, you will be charged for each mile you exceed. The price of the additional mileage will vary, depending on your premium and the type of vehicle being leased. In addition to paying for the extra miles, there are other fees associated with leases, such as wear and tear expenses. If you have a long commute or like to take road trips, you may want to steer clear of a car lease.
Selling or Trading
After a few years and paying off your auto loan, you can sell your vehicle or keep it and purchase a new car. However, if you lease the automobile, you can contract another vehicle once the agreement ends or buy the car. However, the money you have spent on the lease is generally not counted towards the auto loan. Therefore, many buyers choose to purchase the car, giving themselves the ability to keep the vehicle, sell it, or trade the car or truck in when making a new purchase.
Regardless of whether you lease or buy a car, there are advantages and disadvantages to consider. Ultimately, the choice is up to you, based on your credit history, finances, and preferences. This guide should help you to make a more informed decision.
About the Author
Meghan Belnap is a freelance writer who enjoys spending time with her family. She loves being outdoors and researching new topics that help to expand her horizons. You can often find her buried in a good book or out looking for an adventure. You can connect with her on Facebook right here and Twitter right here.
