Auto Financing Vs. Leasing: Take An Informed Decision In 2020
Purchasing a pre-owned four-wheeler from a pre-owned car dealerships in Memphis TN is a long term investment that requires thorough research. It is an expensive affair, especially when you cannot pay full upfront for your dream car.
There are many used car dealers in Memphis TN. After deciding on which car to buy, the next big step is to decide whether to go for financing or leasing. Both options have their pros and cons and let you use the vehicle without making immediate payments. However, one must know the difference in choosing what suits better. Here is the difference between financing and leasing that will help you to make an informed decision in 2020.
1. Who will be the owner?
In auto financing, you will own the vehicle, once you are done paying all the installments or when you settle the loan. In case of leasing, you use the car on rent for a limited period, which is usually two to three years. After the term ends, you no longer have the right to use it and will have to return it to the owner. Hence, financing gives you the option of owning the vehicle, whereas you are not entitled to do so in leasing unless you make arrangements to pay more and own the car.
Monthly payment in financing is more against leasing. This is because financing installment includes a fraction of the car’s actual cost along with taxes and miscellaneous fees. However, the lease cost includes only depreciation on the vehicle in the form of rent.
3. Terms and conditions
Financing gives you the freedom to drive your car as much as you like since it will get transferred in your name once you pay the loan. However, leasing may restrict your driving. The owner can limit mileage that the lessee can put on their vehicle. You may end up paying extra bucks for not following terms.
4. Resale option
An auto financed vehicle offers you the advantage of changing the vehicle. You can sell it and get another one after paying the balance loan. But because a leased car needs to be returned, you cannot sell or change it and will have to drive it for the fixed period. You may go for trimming the lease period, but that too comes at the cost of penalty fee for not adhering to the agreement.
5. Wear and Tear
The owner of the leased vehicle can demand money for excessive wear and tear of the car, whereas this is not the case in financed vehicles.
You need to return leased vehicle in the same condition (slight wear is an exception). But you can customize and upgrade a financed vehicle as you will have equity in the car once the term of the loan ends.
Now that you know about options for sourcing funds for your car, decide which used luxury car to buy and leave the rest to Auto Universe, the best used car dealership in Memphis TN. We provide competitive financing options and work to offer awesome auto financing deals for your pure luxury.