Want to be a smart customer? Before you begin the car-buying process, we
highly recommend spending some time with "Understanding
Vehicle Financing." This
pamphlet from NADA, the National Automobile Dealers Association, helps you
evaluate your financial situation before financing or leasing
a new or pre-owned vehicle.
As you consider your purchase,
here are some terms you might encounter when discussing finance packages with
your business manager:
A lease can be a good way to have
a more affordable payment than when buying a car. Your lease payment covers
only the vehicle depreciated value (plus the lending institution's monthly
finance charges), not the entire purchase value. Most vehicles are leased for 24 to 48 months,
then returned to the lease company. We
don't recommend leasing a vehicle for longer than its general warranty. For people who drive an average number of
miles and take good care of their vehicles, leasing is a good financing
alternative. Note: If the vehicle incurs
excessive wear and tear or mileage during the lease period, a fee will be
assessed when the vehicle is turned in.
Traditional financing is an
installment transaction over a period of time. You agree to pay the amount financed, plus an
agreed-upon finance charge. Traditional
financing is probably right for you if you like the idea of owning a vehicle or
you plan to keep the car for more than a few years. The Ed Hicks Family of Dealerships work with
many different lenders to offer you competitive rates.
Either could be advantageous,
depending on incentives offered by vehicle manufacturers, interest rates in the
market and even the time of year you're shopping for a vehicle. Leasing often results in a lower monthly
payment because payments cover only the vehicle depreciation - the difference
between the purchase price and its projected value at the end of the lease. If you drive an average number of miles and
take good care of your vehicles, leasing may be a good option. Financing, on the other hand, may be a better
option for you if you plan to keep the vehicle for more than a few years or if
you simply prefer the idea of ownership. The easiest approach? After you pick out a car you like, simply ask
your sales associate to show you a comparison of current financing and lease
deals.