Leasing Vs Finance
Leasing Your Vehicle
- You will always be making monthly payments towards your vehicle
- A lease contract is expensive and usually difficult to break
- Tax breaks are usually available if the vehicle is used for business purposes
- You get to drive a new car every 3-4 years but must return the vehicles in good condition/accident free to avoid additional fees
- In some cases, maintenance of the vehicle is covered or included at a discounted rate
- There are additional fees if the vehicle is returned with more kilometers driven than initially agreed upon
- There are additional fees if the vehicle is returned with more kilometers driven than initially agreed upon
If you have a stable lifestyle, like to drive a new vehicle every few years, drive a consistent amount every year, have a good credit history and have no problem properly maintaining your vehicle, leasing may be a good option for you.
Financing Your Vehicle
If you prefer to own your own vehicle, drive your vehicle for a long time, have the freedom to do whatever you’d like with your vehicle, build resale value, and eventually become payment free, financing may be a good option for you.
- You can pay off your auto loan which will eliminate your monthly payments
- You have the freedom to trade-in or sell your vehicle whenever you’d like
- Overall will usually costs less than leasing a vehicle
- You own your vehicle and can do what you please with it
- Maintenance of the vehicle is not covered, although in many cases maintenance packages are available to help save money
- The vehicle is owned by you so you can drive as much or as little as needed
Leasing vs Financing with Bad Credit
A bad credit score will make things more complicated when leasing or financing a car. It is going to be harder to get a loan and your interest rate will likely be higher. Here is the good news, Drive Mango is partnered with multiple dealerships which offer a wide selection of finance options including in-house financing. With these options we will get you approved even if the big banks can’t.
Problems usually occur when someone with bad credit is trying to lease a car. With a lease, you don’t own the car, the dealership remains the owner during the whole lease period. Leasing is also more likely to hurt your credit than help it if you have a lower credit score to begin with.
When leasing vs financing a car with bad credit, we recommend to go with financing. It is much safer, offers a chance to help rebuild your credit, and costs less in the long run.
How Leasing vs Financing affects your insurance
The good news is, there is no difference in insurance costs whether you are leasing or financing your vehicle. Your insurance cost is determined by a number of different factors including your driving history, where you live and the type of vehicle you are driving.
If you are involved in an accident and your car is written off, the outcome remains the same regardless of leasing or financing. Your insurance coverage will pay off the debt on the car first, if your car is worth more than what is owed, you will receive the remaining balance. If you owe more than what your car is worth, “gap-insurance” is available at the time of purchase to cover these costs.
