Buying a new vehicle can be as cumbersome as it is exciting when there are a lot of decisions to make. Once you have chosen the budget, the make, and model, there is still some decision-making left. This is to choose between financing and leasing a vehicle, both of which have their pros and cons. There are some major mistakes that you should avoid, regardless of which you choose, financing vs. leasing a vehicle.
Here, we will look at two crucial points of caution for each.
1. Auto loan mistakes to avoid
- Not looking for options
While some people make use of credit unions for vehicle loans, others crack a good deal with their local banks. To ensure that you get the best deal while financing your vehicle, you must investigate all your lending options, and that must include the dealership. If you wish to do it online, you can find multiple websites like E-loan and RoadLoans, which will help you compare and even get a good deal. - Caving in quickly
One of the most important steps to follow before going out for a car loan is to decide which model you are buying. This is because when you visit a dealership, they will give more attractive automobile loan offers if you buy a more expensive car, a different model, or a different color. It is important to not cave in for such offers because you will end up spending more than your budget.
2. Leasing mistakes to avoid
Now, let’s take a look at mistakes to avoid while leasing a vehicle:
- Not negotiating the price
It is a common myth that when a consumer leases a vehicle, they have to pay the MSRP or the sticker price, and it is not true. To understand it better, you must know that the lease amount is supposed to be decided based on the capitalized cost. This amount can and should be negotiated when you go out to lease a vehicle. Not negotiating on the capitalized cost is a very common mistake, and it makes the car cost way more than it actually should. So, before stepping out, know that you have a right to negotiate. - Not getting the right vehicle for lease
Apart from the features and style, what you must focus on is the value of the car at the end of the lease. Do not pick a car make or model that depreciates heavily as it will cost you more in the lease. It may be difficult to get this kind of information from the dealer, so do a bit of research and find out car makes and models that do not depreciate as fast as others. It may be a little extra effort, but it is worth your time.