Should you finance your next car with a car loan or a lease? It's a great question so let's address it. Here at Central Auto Group in Plainfield CT, we're big believers in offering people great choices. That's why we offer car buyers in Willimantic and New London CT outstanding car brands like Hyundai, Mazda and VW. In the same way, we believe either a loan or a lease might serve you well. Let's look at the differences and the benefits.
The most popular way to pay for a car is with a loan. It's pretty simple. You borrow money from a lender and pay interest every month as part of your payment. The interest rate depends on your credit score: The better your credit, the less you pay in interest. You pay off a loan over a certain amount of time, 24 to 72 months or more, and at the end, you own the car outright.
One of the biggest benefits of a car loan is the fact that you are creating personal ownership in the car you're buying. As you make your monthly payments, you're building cash value, or "equity," in that car. That cash value is real money that's in your name, so you can use that money to help buy your next car. When you make your payments on time, you're building your credit score, which helps you qualify for lower interest in the future.
Depending on your financial situation, one of the big downsides of a car loan can be the need for a sizeable down payment. It's not that a lease doesn't usually require money upfront: It does. But the initial payment is nearly always more for a loan and some people don't have the amount that's required. What's more, the monthly payments are nearly always higher for a car loan and some people don't have that much available every month.
With a lease, you're basically paying for the privilege of borrowing the car. You aren't buying the car: It's more like a long-term rental. Most leases last for 36 months, and that's when you return the car to our dealership. When you do that, you'll driver here from your home in Norwich or Killingly, CT, pay for any excess wear-and-tear on the car and then decide on how to acquire your next car.
By far the #1 reason people consider leasing a car is because the monthly lease payment is nearly always quite a bit less than a car loan. If there's a "due at signing" amount, it's usually less than the down payment on a car. When you return your leased car to us, you don't have to sell it. We take care of that for you. At the end of your lease, one simple option you have is to sign another lease and drive home in a brand-new car
Leasing is like renting: You aren't creating ownership in a leased vehicle, so you aren't growing cash value that can help you pay for your next car. While leasing costs less every month, leasing costs more in the long run.
Ask us for more details and get the process started with our online tools. You can apply for financing in advance and find out what your present car is worth with our "Value your trade" tool. Learn more by contacting us at Central Auto Group in Plainfield CT.
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98 Lathrop Rd
Plainfield, CT 06374
98 Lathrop Road
Plainfield, CT 06374
98 Lathrop Rd
Plainfield, CT 06374
98 Lathrop Road
Plainfield, CT 06374
98 Lathrop Road
Plainfield, CT 06374
98 Lathrop Rd
Plainfield, CT 06374
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