You can pay cash for the vehicle you choose. That may mean taking money out of savings, home equity, or investments. If you have the means to do this and the desire to not have payments, then this may be a good choice for you.
TWO: You Can Finance
Traditional financing is for those individuals who plan on keeping a vehicle for many years. Depending on the year of a vehicle, you can finance an auto loan for 1, 2, 3, 4, 5, 6, and 7 years. Once you have found a vehicle that suits your needs, our Finance Department can do your loan shopping for you. We work with local and national banks and Credit Unions to find the best auto loan for you.
THREE: You Can Lease
Many financial guru's say that you should lease things that depreciate and buy things that appreciate. A vehicle is a depreciating item. For many drivers, leasing a new car is a good alternative to purchasing a new vehicle. And, based on your lifestyle or business needs, leasing could be a very sensible option for you. Leasing is ideal if you usually don't finish paying for a vehicle before you trade it, or if you pay it off and immediately replace it.
Leasing has changed over the last ten years, and is now regulated so that consumers are more protected. The increasing popularity of leasing in the last few years has helped to simplify leasing terms. The competition for leasing customers has also led car manufacturers to make both terms and prices extremely attractive. Depending on your circumstances, you can use your leased vehicle for business purposes. The lease payment, or portion of it may be tax deductible. (Consult your tax adviser for specific information.)
Leasing Offers Three Advantages
Lower Monthly Payments . . .
Since you are only paying for the time that you use the vehicle, your monthly payment can be significantly lower that making standard retail payments. A down payment helps lower the payment on a lease more than on a loan. $1000 down is spread over 36 months vs. say 60 months and impacts the payment more.
More Vehicle For Your Money . . .
Because your monthly payments may be lower, you can increase trim levels and get extra options that you might not have under retail financing arrangements. In essence, if you have a $350 per month budget, you can lease more car vs. financing.
Drive A Newer Vehicle More Often . . .
Flexible lease terms let you set the length of time you wish to drive the vehicle. Most leases have a minimum and maximum lease period. How often you step into a new vehicle is up to you. Most people come to the conclusion that they would rather drive a new vehicle every three years, and keep it under warranty than drive a seven or ten year old car and have to keep making repair payments.
What Are the Options at the End of the Lease Agreement?
Trade in the vehicle on a new one.
Sell the vehicle outright.
You can buy the vehicle for the guaranteed purchase price and own it.
If your lease is paid in full, simply turn it in and drop it off.
Why Drop It Off?
If the vehicle is worth less than what the guaranteed purchase price, then it does not make sense to trade it or buy it. In a traditional finance agreement if you owe more than what the vehicle is worth, you have negative equity. You either have to come up with the difference or roll it over into another loan. With a lease, if the value is less than the purchase price stated in your lease agreement, then drop it off and let the lease company deal with the negative equity--not you. Go get another vehicle and don't worry about rolling over any negative equity.
(Please check your lease agreement for lease end options. Not all are the same. Also, consider any excessive wear and tear, and over mileage charges when you drop off the vehicle.)