Harder to lease or finance a car
Is it harder to lease or finance a car and how credit scores can affect a buy or auto lease?
When it comes to owning a car, there are many questions that goes around in one’s mind. Of all of them, there are however two that needs to be answered at the earliest and that is whether it is better to lease a car or finance it. The other question is what role does one’s credit score play in obtaining the finance or get an auto lease. Now, these are really crucial information that any would-be car owner needs to have in hand before venturing out on their car buying journey. So, here are the answers.
Auto Lease or Finance- Which Works Better?
Whether you want to lease a car or buy the car, is a personal choice. But, remember one thing. The end result as to whether you will be able to arrange for an auto lease or get a finance easily will also be judged by the credit score you have. But first, lets talk a little bit about financing and leasing a car.
Leasing a car has got its advantages, and that cannot be denied. You get to drive in a new car and do not have to worry about the maintenance at all. Once the lease term is over, you just bring it back to the dealership and get yourself yet another new one to drive in. So, when it comes to auto lease, it is all about luxury and convenience, if that is what only matters to you. At the same time, the monthly payments on an auto lease are less compared to what you might have to pay for if you take an auto loan. So, it also depends on the financial standing of the buyer too whether they would prefer to pay interests on auto loans, or they will go for low monthly payments.
But, one should have a know-how of the downsides of auto leasing as well, and these includes no equity, limitations on the mileage, expenses to be paid for wears and tears, and an excellent credit score.
Financing a Car
For some car buyers, financing a car means more peace of mind. Those looking for a long term investment, should go for buying the car rather than leasing it. Though the downside is that you have to gear up for higher interest rates and payments, there is this satisfaction that at the end of it all, you will be the owner of the car.
The Role of Credit Scores
Your decision of whether to buy a car or lease it gets finalized now when you have a clear idea of the credit score. When it comes to the car leasing business, you need to have a top-notch credit. Without a good credit score, it is not easy to secure an auto lease. Experts say that a good credit score of nearly 680 is required to get one. The higher, the better. In any way, if you are not sure of where your credit score stand, then get a credit report and then consider a finance or leasing a car.
A god credit score is a must as that goes in justifying the interest rate that will be put on you in case you have decided to purchase the car or finance it or whether you are even eligible to lease the car or not.
If you have a bad credit, then understand that it will be hard for you to get an auto lease. Dealers who lease out cars generally lease out only to those who have a good credit score as individuals with poor credit are poor risks. On the contrary, it might be easier to purchase a car in the given scenario rather than opting for an auto lease.
So, if you think or are confirmed that you have a poor credit score, then start working on it to improve it. In case you can arrange for increasing the down payment, or you can get a cosigner, then that will be of great help to you. Be informed so that you can take the right decision.