Leasing versus Financing
Are you currently in need of a car and trying to decide whether you should lease or finance? As you might imagine, financing is the most common choice, with leasing making up 31% of new car sales in 2016.
Leasing and Financing arrangements vary greatly. Read through our comparison list below to see which option fits your particular needs.
Choose Leasing if:
You enjoy that new car smell - If you like to update your vehicle every few years or so, this option is for you.
You have a hard time committing - Leasing is like renting a house; while you’re paying money for the privilege, you never really own it. You’re paying for the luxury of having an updated vehicle, which you’ll probably switch every couple of years.
You want warranty coverage at all times - When you lease, your car will likely always be under warranty. You don’t have to worry about major mechanical problems, just as though you owned a new vehicle.
You want lower payments - The great thing about leasing is that you don’t usually have to give a down payment, and month-to-month payments are about 30% to 50% lower than loan payments on the same car.
You don’t want to worry about selling - Selling a car requires work. When your lease is up, you just return the car to the dealer.
Choose Financing if:
You want to own but can’t pay in cash - Once you make all of your payments, the car is yours.
You don’t mind paying a down payment - When you finance a car, you usually have to pay 10-15% as a down payment.
You want unlimited mileage - When you lease a car, you are limited to a number of miles you can drive per lease period. Owning a car gives you absolute control to travel whatever distance you choose.
You want to personalize your car - Leases usually forbid any sort of car modification. When you own a car, you can upgrade, change the wheels, make it your own.
You want to improve your credit score - When you finance, you are using someone else’s money to pay for the car. Make your payments on time and you could see your credit improve over the years.
You want basic car insurance - Whether you lease or finance, financial institutions usually require more auto insurance coverage than your state's minimum requirement. If you finance though, you can select the coverage that best fits your situation once you've paid off your car loan.
Whether you end up choosing to lease or buy, it’s our objective to make sure every driver has the coverage they need. Call one of our friendly agents at 1-800-INFINITY today to receive an auto insurance quote within minutes or get a free quote online!
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