Financing a vehicle is something that most people will have to do once, twice or several times throughout the course of their lives. There are a few different ways that one can go about vehicle financing and those include:
• Vehicle Leasing
• Vehicle Loans
Both of these have their benefits and drawbacks and must be thoroughly considered prior to making any sort of decision. Either way, you choose one thing that will remain the same is the fact that both will affect your overall income for several years to come. You will be required to fill out an application for credit, that will be used to determine rather or not you are eligible for financing, if you have a good credit score this could be easy, if not you may have difficulty finding financing for a vehicle. Typically the financing option will last anywhere between 3 to 5 years depending upon the amount of the loan, and your payment arrangements.
Leasing a vehicle is completely different and has a variety of aspects that make it typically appealing to the average consumer. Some of the key appealing points in leasing include:
• Lower monthly payments
• Lower down payments
• Lower costs of maintenance
By leasing a vehicle, you will be gaining a vehicle with less money all the way around. Typically leasing a vehicle is cheaper than obtaining financing for one, and you will have a longer warranty than you would outright purchasing a vehicle. This could prove beneficial if the car ever malfunctions mechanically or otherwise. It is well known that when a car breaks down or any part of the vehicle malfunctions it could be extremely detrimental to the consumer as well as their bank account. With this type of warranty, many items will be covered that would not generally be covered under a financing option. However, always keep in mind that at the end of the leasing period, there will be a balloon payment due – which must either be settled in cash or refinancing … or you have to trade the vehicle in and start all over again.
The ultimate choice is yours – financing versus leasing, it is all the matter of doing some extensive investigation and figuring out which option works the best with you and your financial situation. If you have no credit or bad credit, you will likely have to speak to a lender that specializes in these types of situations, there are many ways that even with a bad credit score that you can obtain the financing you need to obtain a reliable vehicle at a price you can afford. For instance, there are those who provide individuals the opportunity to of rent-to-buy or direct/private-buy, which I will explain another day.
Always remember, you as the customer have the right to choose. This includes your choices on:
- All the additional add-on’s, which are added to the purchase/leasing contracted price and could inflate the capital unnecessarily.
- To obtain your own short-term insurance, outside of the purchase/leasing contract. If this is included in the purchase/leasing contract, you could be charged an annualized premium on this short-term insurance and could be paying interest on your insurance instalments.
Once you have made your choice on the financing of your new vehicle and want to know how to restructure your repayments to settle this financing in a shorter time period and with less interest over the term … Feel free to contact us directly for coaching in this regard -> Click Here
With Love, Gratitude & Grace
- Yvonne E. Venter-Louw
- YEVL (Pty) Ltd.: Founding Director & Principal
- Researcher, Advisor, Educator, Coach, Mentor, Keynote Speaker & Host of the Financial Independent Coach show on YouTube
- Personal Thesis: The Psychological impact of past experiences (and the rehabilitation thereof) on daily driven financial decisions.
- Naturally creating and experiencing Freedom, Meaning & Wealth!
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