If you are considering buying a vehicle then you are also probably thinking of possible financing or leasing options. Before going on this exciting journey, take a moment to learn more about the differences between financing and leasing. Keep on reading to find out the answers to all your burning finance and lease questions.
1. What is the difference between leasing and financing?
Financing a vehicle is quite different from leasing one. There are differences when it comes to ownership, monthly payments, vehicle return and many more. The greatest difference between financing and leasing a vehicle is that when you lease a vehicle, the vehicle does not belong to you but you can use it for the entire duration of the leasing term. However when financing, the vehicle belongs to you.
2. What are the benefits of leasing?
There are many benefits to leasing a vehicle. First of all, the monthly payments are lower when you lease a vehicle because you are not paying for the entire value of the vehicle. You are only paying for the number of months or years you are leasing the vehicles. Another benefit of leasing a vehicle is that at the end of the leasing term, you have the opportunity to lease another vehicle. So you do not have to commit to one vehicle for its entire lifespan. This also enables you to enjoy a brand new vehicle every few years.
3. What are the benefits of financing?
When you finance a vehicle, you basically have the right to do whatever you want with it. So you can therefore freely customize your vehicle as it pleases you. There are also fewer restrictions as to how much you can drive your vehicle, however, it will also be important to keep in mind that the more you drive a vehicle the lower its resale value is going to be if you ever decide to sell it (because of the mileage).
4. How long is a leasing term?
When you are leasing a vehicle there are some few things you should keep in mind. Most lease agreements have a term of 3 years. But you can make it longer or shorter depending on your budget and goals. However, you will be subject to higher monthly payments if your lease term is shorter than average.
5. What are the penalties for ending a lease before it’s over?
It is also not advisable to terminate your lease agreement before the end of the lease. However the closer you are to the end of the lease, the lower the charges will be and the easier it will be to terminate your agreement. But if you are not so close to the end of your lease agreement the penalty will be considerably high.
6. What happens at the end of a lease?
When you lease a vehicle, the vehicle does not belong to you so at the end of the leasing term you have to return it to the dealership. However, you still have the possibility to renew the lease or lease a new vehicle. When you finance a vehicle, the vehicle completely belongs to you when you are done making all your payments. So you can keep it as long as you want or you can also trade it in.
Financing or leasing? The choice is really yours to make! Contact us at Jim Pattison Volkswagen Surrey for more information or apply for financing online today!