{"id":1558,"date":"2023-10-10T16:32:11","date_gmt":"2023-10-10T16:32:11","guid":{"rendered":"https:\/\/first-exchange-bank.flywheelsites.com\/?p=1558"},"modified":"2024-03-18T13:08:45","modified_gmt":"2024-03-18T13:08:45","slug":"financing-vs-leasing-a-car-in-north-central-wv","status":"publish","type":"post","link":"https:\/\/www.firstexchangebank.com\/financing-vs-leasing-a-car-in-north-central-wv\/","title":{"rendered":"Financing vs. Leasing A Car In North Central WV"},"content":{"rendered":"

If you\u2019ve been looking at the\u00a0skyrocketing costs of vehicles<\/a>\u00a0and wondering how you will finance your next car, you\u2019re not alone. With long wait times, limited selection, and little room for negotiation, buying a car right now can feel like a hassle\u2014without having navigating financing options for those increasingly expensive sticker prices. What is causing these price surges? Jared Wyrick, president of West Virginia Auto Dealers Association,\u00a0describes the situation<\/a>\u00a0as a combination of demand after the initial lull with the pandemic, extra money from stimulus packages, and a shortage of semiconductors\u2014computer chips necessary for all the high-tech wizardry of new vehicles. \u201cIt\u2019s ECON 101,\u201d he explains, \u201cthe demand is there but the supply is not.\u201d<\/p>\n

While leasing\u2014an option that offers lower monthly payments\u2014might seem like a great option, it sometimes seems to have fallen out of favor. With a high of about 34% in 2017, leases now make up only about a quarter of new car arrangements in the US. However, here in West Virginia it\u2019s even lower:\u00a0only 8%.<\/a>\u00a0On the other hand, though financing your vehicle with a loan may be more popular, it will definitely cost you more up front and each month\u2014money you won\u2019t recoup until you sell your vehicle down the road.<\/p>\n

If you aren\u2019t sure which option to choose, this post is right for you. We\u2019ll cover the basics of leasing and financing vehicles, the pros and cons of both, and the main factors you might consider to help you determine which one will work best for your unique needs and budget.<\/p>\n

What does it mean to lease a car?<\/h2>\n

When you lease a car, you are paying to use it, with the benefit of some maintenance included. When you\u2019re done with your lease, you\u2019re expected to return it in the same condition that it was when you originally received it, and if it\u2019s not, you\u2019ll be charged for any damage that goes beyond the usual wear-and-tear. This type of arrangement may sound unique and it is as\u00a0Investopedia explains,\u00a0<\/a>\u201cLeasing a vehicle is similar to renting an apartment in that you make monthly payments while enjoying temporary use of the vehicle.\u201d<\/p>\n

Just like getting a loan, you need to have decent credit to lease a new vehicle with good terms. According to\u00a0Car and Driver<\/a>, over 680 is good, and the lower the score, the more you will pay at signing\u2014if you are able to get a lease for a new vehicle at all. If your score is too low, you might qualify for a\u00a0used car lease<\/a>\u00a0instead.<\/p>\n

Monthly payments tend to be lower, which is a major appeal of leasing over buying a vehicle with a loan. However, it is not necessarily the best financial investment. As\u00a0Consumer Reports<\/a>\u00a0points out, \u201cyou\u2019re just borrowing and repaying the difference between the car\u2019s value when new and the car\u2019s residual\u2014its expected value when the lease ends\u2014plus finance charges.\u201d At the end of the lease term, you might owe the dealer money, with nothing to show for your payments.<\/p>\n

\"\"<\/p>\n

What are the benefits of leasing a car?<\/h2>\n

Despite the fact that leasing will likely end up costing drivers more money than buying, a significant portion of new cars are leased each year. So why do so many people choose to lease cars?<\/p>\n