Buying a car can be exciting and overwhelming. After all, there are so many decisions that go into it. These include deciding the model and color that you want as well as picking a budget that will not burn a hole in your pocket. All these decisions are important, and since you are new to it, there is a lot of potential for committing mistakes. One such area of concern is financing vs. leasing a vehicle. So, before you make up your mind and make a decision, ensure that you have considered these things to avoid any mistakes while leasing or financing your vehicle.
Financing vs. leasing a vehicle: Mistakes first-timers should avoid
When getting auto finance
- Giving more importance to payments over the price
This is a classic rookie mistake that most people make when financing a vehicle. When you get your vehicle financed, you instantly start calculating the budget to repay the loan, and while doing this, you often tend to ignore the price of the vehicle that you will be paying. However, it is important to understand the overall price of the car and consider the overall terms as well so that you do not pay a company more than the actual price of the vehicle.
- Not being able to say no
When you go out to buy your first vehicle, it is common to feel apprehensive. These apprehensions even prevent many people from negotiating the price of the vehicle or the terms of the loan. This mistake while financing or leasing a vehicle should and can easily be avoided. When you start negotiating, you are under no obligation to stay and make a purchase. If the dealer cannot provide you with a good deal or you do not like the way they are treating you, you can always walk away. That is always a better choice as compared to getting yourself a loan that you may regret.
When getting a vehicle on lease
- Not considering the overall cost of the lease
When you go out to lease a vehicle, it is fine to consider the monthly payments, but do not lose focus of the total cost of the lease that you will be paying. It is easy to calculate and also helps you decide whether or not the vehicle is in your budget. You need to multiply your monthly lease amount by the number of months in the lease minus one month, and then add the upfront payment at the final score. For instance, if your upfront payment is $2000, your lease is 24 months, and your monthly payment is $200, your calculation is 23 X 200 = 4600 + 2000, which equals $6600.
- Not knowing your credit score
When you walk into a lease shop without knowing your credit score, it can make you end up in a lousy deal. People with a low credit score are either offered a poor deal or are denied a lease completely. So, to avoid these disappointments, ensure that you have checked your credit score well in advance.