Financing vs. Leasing

The decision between leasing and financing depends on various factors, including your financial situation, your long-term plans for the asset, and your personal preferences. It's advisable to carefully evaluate the terms, costs, and implications of each option before making a decision. Whether you decide to finance or lease your new vehicle, our team at Kelowna Chrysler will ensure we find you the perfect deal!

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BENEFITS OF FINANCING A VEHICLE

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You Own the Car

Financing a car allows you to eventually own the vehicle outright. Once you complete all the loan payments, the car becomes your property. This gives you the freedom to use the car as you please, make modifications, and sell it whenever you choose.

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Flexibility of Down Payment
and Term

Car financing provides flexibility in terms of loan options and repayment terms. You can choose a loan duration that suits your financial situation and budget. Additionally, lenders offer various financing options, such as fixed-rate loans or balloon payments, allowing you to select the option that aligns with your preferences and financial goals.

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Freedom to Customize
Your Vehicle

Financing means you are free to customize or modify your car however you like, whether that be upgrading the audio or a custom paint job you have no restrictions on what you are able to do to your vehicle.

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Freedom to Customize
Your Vehicle

Financing means you are free to customize or modify your car however you like, whether that be upgrading the audio or a custom paint job you have no restrictions on what you are able to do to your vehicle.

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No Possibility of Penalties

You will have no possibility of penalties once your vehicle financing term comes to an end, any imperfections or additional mileage will not incur penalty charges.

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Extended Warranties Available

Extended warranties are available to purchase after your manufactures warranty is up, these are available for various lengths, what is covered, and costs to suit your budget.

HOW FINANCING TYPICALLY WORKS

The customer visits the dealership and selects a vehicle they are interested in purchasing. The available options may vary based on the dealership's inventory and financing programs.

To secure financing, the customer fills out a loan application, either with the dealership's finance department or directly with a financial institution partnered with the dealership. The application collects information such as the customer's personal details, income, employment history, and credit information

The lender evaluates the customer's creditworthiness based on the provided information. This includes reviewing the credit score, credit history, and other factors that determine the customer's ability to repay the loan.

If the customer's creditworthiness meets the lender's criteria, the loan application is approved. The lender specifies the loan amount, interest rate, repayment term, and other terms and conditions. The customer may have the opportunity to negotiate some of these terms.

The customer may be required to make a down payment towards the purchase price of the vehicle. The down payment amount can vary depending on factors such as the purchase price, the lender's requirements, and the customer's financial situation.

The customer makes regular monthly payments to the lender over the agreed-upon term of the loan. Each payment consists of both principal (the loan amount) and interest (the cost of borrowing the money). The monthly payment amount is determined by factors such as the loan amount, interest rate, loan term, and any additional fees or charges.

The customer repays the loan according to the agreed-upon terms. This typically involves making monthly payments for the duration of the loan term until the entire loan amount, including interest, is paid off. It's important to make the payments on time to maintain a good credit history and avoid any potential penalties or fees.

While financing the vehicle, the customer takes ownership of the vehicle and can use it as their own. However, the lender has a lien on the vehicle as collateral until the loan is fully paid off. Once the loan is repaid in full, the customer receives the vehicle's title, indicating full ownership.

It's important to carefully review the terms and conditions of the financing agreement, including the interest rate, loan term, and any additional fees or charges. It's also advisable to consider your budget, financial goals, and any potential trade-offs before deciding on a financing option.

BENEFITS OF LEASING A VEHICLE

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Lower Monthly Payments

One of the primary benefits of leasing is that the monthly payments are typically lower compared to financing a vehicle through a loan. Since you're only paying for the vehicle's depreciation and the lease term is shorter, the monthly payments are often more affordable.

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Lower Upfront Costs

Leasing often requires a lower upfront cost compared to purchasing a vehicle. While there may be some upfront payments involved, such as a security deposit or the first month's payment, the down payment is usually lower or even non-existent.

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Access to Newer Vehicles

Leasing allows you to drive a new vehicle more frequently. Lease terms usually range from two to five years, so you can upgrade to a new model once your lease term ends.

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Flexibility at the End of the Lease

Leasing offers flexibility at the end of the lease term. You have the option to return the vehicle to the dealership and walk away, lease a new vehicle, or even purchase the leased vehicle at a predetermined price (buyout price) if you've grown attached to it.

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Latest Technology and Features

Most lease agreements coincide with the manufacturer's warranty period, which means that any major repairs or maintenance costs may be covered under warranty. This can help you avoid unexpected expenses and provide peace of mind throughout the lease period.

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Warranty Coverage

Most lease agreements coincide with the manufacturer's warranty period, which means that any major repairs or maintenance costs may be covered under warranty. This can help you avoid unexpected expenses and provide peace of mind throughout the lease period

HOW LEASING TYPICALLY WORKS

The customer visits the dealership and selects a vehicle they are interested in purchasing. The available options may vary based on the dealership's inventory and financing programs.

The customer negotiates the terms of the lease agreement, including the lease duration, mileage allowance, and monthly payment amount. The dealership's leasing specialist or finance manager assists in determining the terms based on the customer's preferences and the dealership's leasing guidelines.

Once the terms are agreed upon, the customer enters into a lease agreement with the dealership. This document outlines the specific terms, responsibilities, and obligations of both parties during the lease period.

The customer may be required to make some upfront payments at the beginning of the lease. These can include a down payment, a security deposit, acquisition fees, taxes, and other applicable charges. These costs can vary depending on the dealership and the terms of the lease.

Throughout the lease period, the customer makes regular monthly payments to the dealership. The payment amount is determined by factors such as the vehicle's price, residual value (the estimated value at the end of the lease), lease duration, interest rates, and any additional fees or charges.

Most lease agreements include mileage restrictions, which specify the maximum number of miles the customer can drive the vehicle without incurring additional fees. If the customer exceeds the mileage limit, they typically have to pay a predetermined fee for each extra mile driven.

The customer is responsible for the vehicle's maintenance and repairs during the lease period. It's important to follow the manufacturer's recommended maintenance schedule and keep the vehicle in good condition to avoid any penalties or charges at the end of the lease.

When the lease term ends, the customer has a few options. They can choose to return the vehicle to the dealership and walk away, lease a new vehicle, or purchase the leased vehicle at a predetermined price, known as the buyout price. The buyout price is often based on the residual value of the vehicle.

It's worth noting that leasing offers certain advantages over traditional vehicle financings, such as lower monthly payments, and the ability to drive a new car every few years. However, there are also limitations and considerations, such as mileage restrictions, potential wear and tear charges, and the lack of ownership rights during the lease period. It's always advisable to carefully review the terms and conditions of a lease agreement, ask questions, and consider your personal financial situation and driving habits before deciding if leasing is the right choice for you.

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