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What you need to know about leasing vs buying a car in Lincoln

What you need to know about leasing vs buying a car in Lincoln

Are you familiar with the car buying terms “buying” or “leasing”? We are going to shed some light on what the terms mean and how you can take advantage of the very competitive interest rates being offered by lenders all over Canada.

Our Lincoln has a lot of experience in both leasing and selling cars so are perfectly placed to help with this post.

So, what is leasing?

When you lease a car, you are taking possession of it for a predetermined amount of time. At the end of the lease, you can return the car without any further payments or you can purchase it.

The price of the car is already determined in the lease agreement, so you will know precisely what the car will cost when the lease is up for renewal.

You may be wondering why you want to buy something only to return it after a few years.

Well, some people like to have a new car every few years, instead of keeping something for a long time. Since you can return the car at the end of the lease, it gives you the ability to buy a new car without having to worry about paying off the current car loan.

Some businesses like to lease cars because the payments can be written off as a business expense, this is not the case when you purchase a car with conventional financing.

Why do people buy cars instead of leasing them?

With a car purchase agreement, you do not return the car at a predetermined time, you keep the car because you own it. Each payment made, a portion goes towards the interest and a portion goes towards the principal so you are building equity in the car.

The payments made on a lease do not build equity and 100% of it goes to the lender who financed the lease.

How to get a car loan or lease in Lincoln

Since the onset and throughout the pandemic, lenders have become very risk-averse and you will need to have a good credit score and stable income to get a loan.

Before the pandemic, you could get a very competitive car loan with a 650 credit score but now, you will need a 680 or higher score to get the best possible financing terms. You can check out your credit score with services like Equifax.

Without a high credit score, you are going to be forced to pay a higher interest rate, which is something no one wants to do.

Getting professional advice

There is no one size fits all answer on whether you should take a lease or purchase the car outright, what you must do is seek out a local dealership and discuss your options with them.

Even if your credit score is low, the dealership may have lenders that are willing to work with you.

Aside, from finding lenders who will finance the purchase of a new car, the dealership will also be able to give you some advice on what steps you have to take to fix your credit.  This expert advice will help you save money and still get the car you want, so reach out for help now.

We will use all our skill and experience to deliver the lowest possible Lincoln auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

Categories: Auto Loan

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