What's the Difference Between Loans and Leases?
When you're looking for a car, it’s important to know what you want, and we’re not just talking about the make and model. You also have to decide if you want to take out an auto loan – which is part of the financing process – or if a lease is the better option.
Why Take Out a Loan?
The main reason to take out an auto loan is so you can get a car without having to put down a lot of money. You’ll start by borrowing money from a lender and working out a payment plan to pay it off monthly.
You can lower the amount you’ll need to borrow with a down payment, which could come from an older car that you can use as a trade-in. It’s up to you to decide how long you want your loan to be, but it’s important to remember that the shorter it is, the larger your monthly payments will be.
Why Lease a Car?
If you can’t see yourself owning a new or used car for very long, leasing is a great option. This allows you to drive a vehicle for a couple years and then turn it in to drive another one. You will also have the option to buy your lease if you don’t want to give it back.
Another benefit of leasing is that you’re only paying for the car’s value during your lease period, so it’s generally a cheaper option compared to buying.
Want to get more information about auto loans or leases before making a decision? Come down to Gary Lang Auto in McHenry to get all of your questions answered.
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