Choosing the Right Financing Option: Lease Vs. Loan - Shop New & Used Cars at Dorsett Automotive in Terre Haute, IN

Are you planning to buy a new car in Terre Haute? You have two choices: leasing and financing. Each option has its benefits. This guide will simplify these choices to help you decide what’s best for you.

What Is Car Leasing?

Car leasing is like renting a car long-term. You pay a monthly fee to use the car, usually for two to four years. When the lease is up, you return the car. It’s great for those who like driving a new car in Terre Haute without the hassle or cost of owning one. Leasing lets you enjoy a new car every few years, free from worries about its future value.

What Is Car Financing?

Car financing means getting a loan to buy a new car in Terre Haute. You might use a personal loan or other types. You pay back the loan with interest every month. In the end, the car is all yours. It’s perfect for those who want to own their car and don’t mind paying over time. It’s also great for people who drive a lot since there are no limits on miles.

Leasing Vs. Financing: Key Differences

Ownership

The main difference between leasing and financing a car is who owns it. Leasing is like renting; you use the car but don’t own it. After the lease ends, you return the car. It’s great if you enjoy driving new cars often.

When you finance a car, it becomes yours after the payments are made. You can sell it or keep it as long as you wish. However, if you want to sell it later, you’ll have to handle the car’s value decrease.

Monthly Payments

Leasing usually has lower monthly payments than financing. When you lease, you pay for the car’s value loss over time, not the whole price. Financing means paying for the car’s total cost plus interest, increasing monthly payments.

Mileage Limits

Lease agreements have a yearly mileage limit. If you go over, you’ll pay extra, usually per extra mile. So, guess your yearly miles well to avoid extra costs. Financing a car means no mileage limits. You own it and can drive as much as you like without extra fees.

Maintenance and Repairs

Some leases cover maintenance and repairs, so the leasing company pays for regular upkeep and needed fixes. But you might pay for wear and tear damage that is more than usual. If you finance a car, you pay for all upkeep and repairs, including oil changes and other services. But, a new car in Terre Haute usually has a warranty, covering some repairs for a time.

Choosing Between Leasing and Financing

Choosing between leasing and financing a car depends on your situation and what you prefer. If you like getting a new car in Terre Haute every few years, want lower monthly payments, and prefer not to sell your car later, leasing is a good choice. However, financing is likely better for you if you prefer to own your car, avoid mileage limits and extra charges, and don’t mind committing to more extended payments.

Before deciding, read the lease or finance agreement terms carefully and consider how your car needs might change in the future.

Speak With the Experts at Dorsett Automotive

Do you want to learn more about the differences between leasing and financing? You can speak with the experts at Dorsett Automotive in Terre Haute, IN. If you have questions or want more advice, feel free to reach out to us.