Financing vs Leasing

Route 23 Honda Can Help You Decide Between a Loan and Lease

Should I use a loan or a lease to buy my next car? It's a question that we hear a lot at Route 23 Honda. It's also a question we can help you clear up. While your best option will often depend on your personal circumstances, there are some definite pros and cons for both options.

When is a Loan the Right Choice for You?

Are you the kind of Wayne or Butler driver that likes to play the long game? Are you looking for a car that you'll be driving for years to come? If the answer's "yes" then a vehicle loan might be your best fit.

While loans will generally have larger monthly payments than lease agreements, you get to keep the car after the loan's paid off. Depending on how long you keep it on the road, that can add up to years of driving without a car payment. Since you actually own the car, you'll have more freedom to do what you want with it. There won't be any mileage caps, and if you decide you want to do something like sell it you can.

When is a Lease Agreement my Better Option?

A lease might be better if you're a Parsippany driver that doesn't want a long-term vehicle commitment, or who would simply prefer a smaller monthly payment. Similar to a long-term rental agreement, a lease can be a good option for someone who wants a new car but can't afford larger payments. Many leased vehicles also come extensive warranties that can help you save on maintenance.

On the downside though, you have to give the car back when the lease term expires. You'll likewise have to follow guidelines like annual mileage caps and make sure the vehicle doesn't experience any excessive wear and tear. If you damage the car excessively, you'll be billed for it when you bring the car back.

Contact Route 23 Honda to Learn More

If you'd like to learn more about loans and leases, get in touch with the finance team at our dealership in Pompton Plains, NJ. We'd be happy to answer any questions you have, so you can make an informed vehicle purchase.

Financing

Who Owns It

Whether you pay for the car with cash, or finance it and make monthly payments, either way it's yours. Of course, if you're financing it you'll have to meet the obligations the lender requires (maybe a certain down payment amount, timely monthly payments, insurance requirements, etc.). If you don't, the bank has the right to repossess it.

Up-front Costs

If you're financing it, you'll probably need to come up with a down payment. Depending on your overall credit profile this could be very little. You can also trade-in another vehicle and use any equity towards your down payment. The amount of the down payment is usually based on the lender's requirements and your credit score.

Future Value

Your vehicle will be worth whatever you can sell it for in the future and that depends on how well you maintain it. (Be smart and protect your investment with regular scheduled maintenance by a factory-authorized facility!)

End of Payments

Once you've paid off what you owe on your contract, that's it. Your vehicle is 100% yours. The lending institution will probably send you the full title as proof that the vehicle is completely paid off and all yours.


Leasing

Who Owns It

You do not own the car when you lease. You're paying for the use of the vehicle, but the finance institution that you leased it through actually owns it. This is usually why you pay less per month in a lease than if you were to buy the car. .

Up-front Costs

Leases often do not require any type of a down payment. All you usually have to pay is the first month's payment, a security deposit, the acquisition fee and other fees and taxes. But, as with a purchase, if you want to lower your monthly payments you can always pay more upfront.

Future Value

In most leases you don't end up owning it so you don't end up selling it. That's the financial institution's job. Although you may have mileage limits and wear and tear guidelines that, if you exceed them, could cost you extra money when you turn your vehicle back in.

End of Payments

Most people return the vehicle at the end of the lease term. But some like to purchase it during their lease or at the end. Others like to trade it in before their lease is over. Just ask us about these different options before signing any paperwork and we'll make sure you have your lease set up the way you want it.



 

Contact

Route 23 Honda

700 State Route 23
Directions Pompton Plains, NJ 07444

  • Sales: 9739157801
  • Service: (973) 907-9046
  • Parts: 8006397278

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Hours

  • Monday 9:00am - 9:00pm
  • Tuesday 9:00am - 9:00pm
  • Wednesday 9:00am - 9:00pm
  • Thursday 9:00am - 9:00pm
  • Friday 9:00am - 9:00pm
  • Saturday 9:00am - 6:00pm
  • Sunday Closed
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