Should You Lease or Finance That New Vehicle?

Do You Have a Good Down Payment?

Understanding the differences between a car loan and a car lease can help you decide which option will be right for you. At Gill Chrysler Dodge Jeep RAM, you can test-drive great vehicles and take home the one you like best. Here are some important questions to ask yourself when you’re making your next auto finance decision.

Most people assume a down payment is only needed when purchasing their vehicle. But that's not the case. You may also need one if you’re planning on a lease. It's just referred to as a deposit instead. At the end of your car lease, you have the option to purchase the vehicle or turn it back in and get a different vehicle. If you’ve done any damage while you had it, you could be asked to pay extra when your lease term ends.

How Much Mileage Will You Have?

A lease is based on the length of time you’ll have the vehicle, but also on the mileage during that time. Paying attention to your mileage is very important when you choose a lease instead of financing a vehicle. You’ll have a set number of miles allowed on your car lease. If you go over that limit, you’ll have to pay per mile for the additional miles you put on the car. That’s something a purchase transaction wouldn’t have. Come see us at Gill Chrysler Dodge Jeep RAM to get started.

Do You Drive Your Vehicle for Work?

If you drive your vehicle for work, a car lease might make more sense for you. Depending on the kind of job you have and other factors, you could write off the lease payments. But it’s important to make sure you consult with a tax professional first. Not all businesses will qualify, and how you use the car for business is going to matter. Just driving it to and from work, for example, doesn’t count as business use and can’t be written off.

What Kind of Credit Score do You Have?

Getting the best rate on a car lease means you need a good credit score. If you have a high score and nothing negative on your report, you can probably get a better deal. Someone with significant credit problems or a low score may not be able to qualify for a car lease at all. It’s a good idea to check your credit report before you head to the dealership to talk about a car lease. That will help you avoid surprises.

How Long do You Plan to Keep Your Car?

If you don’t like to keep vehicles very long, a lease might be right for you. People often lease cars for two or three years and then take out a lease on another vehicle. That means they always have a payment, but they also get to drive a new car frequently. If you don’t want to keep a car for more than a couple of years, a lease could be the right choice. For people who plan to keep their car for many years, a car loan is probably a better option.

If you’re looking for a great new car in the Fresno, CA area, you can take a test-drive today at Gill Chrysler Dodge Jeep RAM and find a car you love. Visit us today to further explore our auto finance options.