Need help deciding on the best way to finance a used car? The following used car financing guide outlines all your car buying options to help you decide which is right for you.
Decision #1: Cash or Credit?
When deciding on how you will finance a car, you first need to decide whether to pay for the entire car upfront or to take out a loan. With it being almost nearly impossible in this day and age to have enough cash to purchase a vehicle in full; financing seems like an ideal choice for most.
Decision #2: Buy or Lease?
Unfortunately, most car buyers cannot afford to pay for a car in cash. So, their next choice is to either buy or lease.
The advantage of leasing a car is that monthly payments are generally lower. And because lease terms generally only last between 12 and 36 months, you get the advantage of owning a new car every few years. Leases also require little (if anything) in the way of down payments, meaning that if you are a less financially established car buyer, leasing allows you to drive a nice car for relatively little investment.
Decision #3: Private or Dealer Financing?
Leasing is a good way to save money on a month to month basis. However, you still have one more decision to make: Deciding between dealer-offered financing and private lender financing.
The advantages of dealer offered financing are convenience and eligibility. This is because the dealer is most concerned with the ability to get you into the vehicle you need today, so they will pull out all the stops to help you qualify for a loan.
Keep in mind, that when you are deciding on your financing options, not every decision is right for everyone. For this reason, it is important to carefully weigh the pros and cons of each decision point, and decide which option best fits your current needs.