Own your Dream Car

Cash, Finance, or Lease for My New Car- Which is Better?

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So, after a lot of reading, researching, and window shopping, you’ve finally picked what could be your next or first ride. Buying a car is no simple decision. It entails a lot of thinking, planning, budgeting, and spending.


While most of the population finance their cars, and some lease, only very few buy a car in cash. Obviously, the major culprit is the cost. Not many of us can afford a lump sum payment, sometimes not even for a second-hand vehicle. However, cash payment carries the greatest advantages among the three options.

First, paying in cash can eliminate finance and interest costs, which can actually add a fortune to the car’s total price over the long haul. By paying cash upfront, you will only pay for the car’s value, which saves you a great deal.

Buying a car in cash can also give you immediate right to it. You can get hold of its title right away, making it easier to sell or trade it as you wish.

By paying in cash, you can also eliminate the monthly payments, which could be a bit of a burden considering you’ll have to keep up with them for at least a few years.

However, there’s also a major drawback with buying in cash, because you are getting a huge chunk out of your savings. Although you’ve probably saved more eliminating the interests if you bought the car in cash, you could risk yourself financially during a rainy day.


For most people, financing is the more common and more attainable option to purchase a car. You can obtain financing through banks, credit unions, and financial providers, wherein you will borrow money from them and in return you will make monthly payments for a specified period of time.

What’s good about financing is that you might find zero-percent deals, making it as if you’ve purchased by cash. However, you would need to have good credit standing, or else you’ll have trouble finding a competitive deal for yourself. You might also need to prepare a significant amount of down payment in order to qualify.

The car’s title won’t be given to you immediately, and you might have a little difficulty selling the car before the loan is paid, because you only gain full ownership after the last agreed installment is paid.


Although you also pay monthly just like financing, leasing the car gives you more flexibility. Technically, leasing is just renting your car for the period of time you intend to use it. Leasing gives you the privilege to drive a new car from time to time, however, you will never own the vehicle. You cannot trade, sell, or customize it to your liking.

With car lease, it is likely that the vehicle will always be covered by warranty. You won’t be required to secure down payment, and your monthly payments will be cheaper than with financing. However, it’s important to note that this could carry the largest cost over time, since you will keep on renting and never own the vehicle.

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