Leasing and financing are those two kinds of purchasing vehicles that can help break the total price of any new vehicle into the fractions of monthly payments. Both the words arise frequently whenever there is an occasion for shopping a new car, SUV,van, truck or crossover. But the truth is though they sound similar, there are some basic differences between these two words as concepts and even the way they work. So, to consider which one would suit more for you, and while choosing between the two, you can follow these tips and arrive at the best solution for yourself.
As shared by the experts of the Michigan Chevrolet dealer, you need to start with knowing the basic facts about both these options and then move forward carefully to acquire some in-depth knowledge about them before you come to a conclusion. To make it easier for you, we are furnishing those facts on both these purchasing options.
Facts on Financing
Financing can be referred basically as one of the traditional financial arrangement mostly done to help out a buyer with a loan, for big purchases like an automobile piece, or any real value asset like a house or land. When it comes to automobile, it allows the buyers to own a vehicle ultimately, but one has to pay it off through monthly payments that can be spread over months and years.
In financing a vehicle, the buyers are generally asked to make a down payment of an amount between 10 to 15 percent of the total price of the vehicle, while a lender agrees to pay for the remaining part on the day of the purchase. This payment is considered as a loan that the buyer finally has to pay to the lender in monthly instalments that would typically include the loan balance and the interest.
Facts on Leasing
In the cases of Leasing a vehicle the customers would be more interested on trying out a new car in every couple of years or they might want to reduce the amount of the down payment.
It is considered as a lease in which the system allows its customers to pay for a portion of a vehicle cost that they use over the decided term of the lease, that usually runs somewhere between 24 to 48 months. In general, the lease payments are based upon the cost of the vehicle that is expected to depreciate within the span of the lease.
Unlike financing, in leasing the customer cannot own the vehicle even at the end of the term of the lease. But it can be either purchased from the leasing company directly or be returned if one is looking for a new vehicle and henceforth create a new leasing term.
Making the Right Choice
In each of these situationsthe choice would be based on one’s personal preference. If the buyer has a doubt he can take help from dealers like Michigan Chevy dealer who would be happy to help review the current offers available on financing and lease, make you understand their terms and conditions and suggest the best that would suityour purpose.