What are the Basic Differences of Financing and Leasing? Herb Chambers Explains

Once you complete your research and settle on a choice for a new vehicle, you must determine whether you will finance or lease. However, you must understand the difference between the two if you want to select the option that works best for you. That is why we outlined the pros and cons of both in this blog to help our customers at Herb Chambers Chrysler Dodge Jeep Ram FIAT of Danvers.

Financing Overview

While some people have the means to purchase a vehicle outright, most people will seek out financing. Ultimately, this means that you will negotiate with a lender to sign up for an auto loan to cover the cost of the car in question. Interest rates can vary greatly depending on your personal credit score, and for a brand-new product, monthly payments are often much higher when compared to a lease. In exchange, you have complete ownership which gives you the freedom to make modification, drive as you please, and sell it. Best of all, obligations to a car loan will eventually cease and results in long-term savings.

Leasing Overview

Drivers who are not ready to commit to a specific model or simply enjoy driving the latest options on the market will prefer to sign up for a new car lease instead because it costs much less on a monthly basis—saving you more up-front. The vehicle still belongs to the dealer, however, so you will be responsible for maintaining its condition and staying within a pre-determined mileage cap. The duration of a contract is approximately two to three years and you will have the opportunity to exchange it for another model, pay the remaining cost to claim ownership, or return it at lease end.

Speak to an Herb Chambers Financial Advisor for Further Information

Both financing and leasing have their advantages, so the goal is to choose one that aligns best with your budget and lifestyle. Should you require further assistance, we have financial experts on-duty employed at our finance center in Danvers, Massachusetts. Just send us a message through our site, give us a call, or drive out to our location to correspond with our team today.

Categories: Finance
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