Here’s What You Need to Know Before Financing a Car
For most people, paying cash for a brand new $30,000 vehicle just isn’t feasible. That’s why Algonquin Hyundai dealerships proudly offer vehicle financing and leasing options to all of our drivers. But for some drivers, obtaining financing or leasing a vehicle can seem like a confusing, overwhelming ordeal. That’s why we’re here today to break down the basics of vehicle financing so that you can be prepared before heading over to a Hyundai dealership near you.
Before you start the process to finance your Hyundai, you should first understand your options. Since financing a car adds to its total cost (due to interest and loan fees), you should start by deciding between two payment plans: either you can finance the vehicle with a loan or you can finance with a lease. Here’s how the two differ:
- Financing a car with a loan.
Financing a car with a loan involves three major factors: the loan amount (the total amount of money you’re borrowing to get the car), the annual percentage rate (the interest rate you pay on your loan, also known as “APR”) and the loan term (the agreed upon length of time you have to pay back the loan amount in full). If you’re financing a used car rather than a new one, you can expect to pay higher interest rates. The key is to always shop around to find the dealership with the best loan amounts, APRs and terms to suit your budget and lifestyle.
- Financing a car with a lease.
For many people, leasing a vehicle is the most financially feasible option since you’re only paying for a portion of the vehicle’s total cost. Basically, a lease means that you’re only paying to use the car–you’re not paying for the car itself.
Leases often involve a required down payment as well as other fees like monthly sales tax and interest payments, but drivers often benefit from lower monthly payments than they might if they were buying the car. However, leasing a vehicle also means that you don’t gain any equity in the vehicle that might transfer to trade-in or resale value.
No matter what you choose to do, it’s always important to keep the big picture in mind. Take a hard look at your finances, determine what you can realistically spend each month on vehicle financing and then research the fees associated with the Hyundai of your choice before you commit to any kind of financing.
At Rosen Hyundai, our dedicated financial experts are here to help answer your Hyundai finance questions so that you can make the best, most informed decision. Whether you decide to lease or take out a loan, we’ll help you finance your Hyundai in a way that won’t break your bank.
