Getting a new car brings about many important decisions to be made. “What type of car are you interested in?” “How long are you planning to keep the car?” And one of the most important questions, “how are you planning to pay for the car?" Depending on your budget and the plans you have for your new car, there are various options to explore. Regardless if you decide to buy your car up front, finance through a payment plan, or lease a car, you will find that each option has its pros and cons.
Buying a car can be as simple as it sounds. When using this option to pay for your car, you pay the cost of the vehicle upfront. Upon complete payment and transfer of the title, you become the owner of the vehicle. Paying for a car in full works best if you have found an affordable car and the purchase fits into your budget. For many people, buying a car this way alleviates the added cost of monthly payments. Thus, making this option a bit easier than financing or leasing a car.
Financing is another option available if you want to buy a car. However, unlike buying the car upfront, you are making payments on the cost of the car until it is completely paid off. With this option you can choose to finance through a car dealership or get an auto loan from a financial institution. When deciding to finance your car, be sure to do your research and find the best interest rate and term for you.
Similar to financing, when leasing a car you opt-in to a payment plan. What sets leasing apart from financing and buying a car, is that in most cases at the end of the term you do not own the vehicle. If you do decide to lease, you could end up with a lower monthly payment than if you were to finance your vehicle.