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Car Credit Expert

Car Credit Corner//Ask A Credit Specialist

Should I Finance, Lease or Pay Cash for my new car?

You found the right car deal for your budget now you need to find the best way to pay for it. There are advantages and disadvantages to each method you might consider choosing. It depends on the car, how you want to own it (personal or business), your down payment and credit score. Even with bad credit, car finance deals are possible.

Buying with Cash
  • Eliminates car finance interest and financing fees
  • Saves thousands of dollars over the purchase price of your car.
  • Easier to sell your car if and when you choose (its free and clear from lender's holding the title to it).
  • No payments
  • Downside
  • paying with cash reduces your ability to use that money towards another purpose. So a car finance loan provides flexibility in how you want to use your hard earned savings.
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Leasing

Depending on your situation, leasing might be right for you and could be your best car finance loan if you like driving a new car every few years.

  • Usually no down payment required
  • Monthly payments give you the right to drive the car (just like renting an apartment).
  • Payments are typically cheaper than monthly car finance payments.
  • Time period (term of lease) is set for how long you'll have use of the car.
  • Car is under warranty usually during the lease period
  • Lease payments can be deducted from your taxes (for business purposes - check with your accountant)
  • When lease it up, you return the car to dealer. No worry of selling the car.
  • If you like the car, you have the option of buying the cars at the end of the lease.
  • Lease payments are based on the car's residual value (the estimate value of the car at the end of lease term).
  • Downside
  • no equity in the vehicle, you'll have to start over, leasing or buying a new car.
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Financing

Most Canadians choose to finance their car purchase. Car financing is a good way to pay for the car by making monthly or bi-weekly payments for a set term. Loans are often processed quickly and have the benefit of an Instant decision. Because any car purchase is a big investment, remember you need to shop around for that perfect payment plan offering the best car finance rates for new vehicles and used auto loan.

  • The benefits of financing include:
  • Instant decision loans, quick loans online, best car finance deals
  • Bad credit car finance and bad credit car dealerships
  • Best car finance rates and auto loan refinance
  • Use of someone else's money to pay for your car
  • Free up your cash for other purposes
  • You own the car after you paid off your loan (unlike leases you don't own the car)
  • Flexible payment terms (12 to 84 months), affordable payment gets you the right car for your budget.
  • Zero or low percent loan deals typically from auto manufactures, can make financing like paying with cash.
  • The better your credit score, the better availability of attractive low rate loans.
  • Low credit scores can get financing. Typically 600 or less can get financed but it will be harder to get attractive lower loan rates.
  • You still have the car at the end of the financing term
  • Downside
  • You don't own the car until the balance is paid in full
  • Often requires a minimum of 10 percent down payment
  • Takes more per month out of your budget over leasing (longer term reduces payment)

Ask us about car finance, auto loan refinance, bad credit finance, best car loans and car finance deals!
Submit your questions here! askcredit@newcarselloff.com.

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Sales Tax Percentage %
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Total Cost of Borrowing: $0.00, Contact Dealer for More Information

This will provide you with an estimate to what your monthly payments should be. Special finance rate may or may not be used in conjunction with the rebate - check with your dealer for details. Other payment plans may be available which could lower substantially the payment - again check with your dealer for further details.
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Financing is available. Contact Dealer for details.

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