Benefits of buying a car?

What are the benefits of Buying a Car?

Each Car purchase has its pros and cons. You can enjoy the following benefits of purchasing a Car:

  • The Car is yours.
  • You can drive as many miles as you like.
  • Cash can be used to purchase your next vehicle.
  • It’s possible to make it your own.
  • When the Loan is paid off, you won’t be required to make any payments.
  • You can sell according to your own schedule.
  • Leasing is more difficult than financing.
  • Refinancing could save you money in the future.
  • It can be fixed or not.

The Car is Yours

Benefits of buying a car?
Benefits of Buying a Car?

You can buy a Car with cash and immediately own it. The lender will hold the title to the Car until the Loan is paid off. They don’t usually place restrictions on what you can do with the Car.

With each Car payment, you will own a little less of your vehicle if you have a Loan. As interest is paid out, equity increases slowly in the beginning. The amount of interest you pay decreases as you advance on the Loan. Your chance of earning equity increases. This positive equity gives you great flexibility when it comes to Buying a Car. Lessees have no equity in the cars they drive.

Positive equity is when equity gains outpace depreciation. It can be difficult to keep positive equity in a new Car because they depreciate very quickly within the first few years. This is particularly true if your Car Loan term is very long. It is best to put a large down payment and to get the shortest term possible to preserve your positive equity.

You can drive and drive and drive

Nearly all lease contracts have a mileage limit. You’ll be charged hefty fees if you exceed the limit. This is not true for cars you own or that are on a Loan. You are free to drive anywhere you like without any restrictions. If you drive a lot, Buying a Car is more sensible.

Driving long distances is possible without incurring additional fuel costs and maintenance. There are no financial penalties.

You can get cash to pay for your next Car

You can either get equity from the cash you pay for a Car, or you can gain equity by paying off your Loan. This means that you will have some money to help you sell your vehicle and buy your next one. The cash you get from a private sale or trade-in can be used to make a down payment for a new vehicle. A lease gives you no equity for future vehicles.

We’ll take an example: Your $40,000 SUV will be worth $12,000 five years after it is fully paid off and is now five years old. This $12,000 can be used to finance your next SUV. Selling your Car yourself can help you get the best value. However, some consumers prefer to trade their Car in to the dealer to purchase their next vehicle.

Make it yours

You can do so much more with a Car than just hanging some fuzzy dice from the rearview mirror. You can customize your Car only by what you have available. There are very few things that you can’t do with a Car purchased on a Loan.

You can get at least some of the money back if you make improvements to the vehicle that increase its value. You would have to take the additional equipment out of the vehicle if it was leased. There would be no return on your investment.

There are no more payments after the Loan is paid off

 

You don’t need to make any additional payments if you pay the final installment on a Car Loan, or cash upfront. This alone makes it a strong argument to get a shorter Car Loan and keep your Car for a long period of time. For example, if you buy a pickup truck with a 4-year Loan and keep it for seven year, you will have three years of no Car payments. You will be responsible for a Car payment each month that you lease a vehicle.

This strategy can be used by smart shoppers to pre-finance the next Car purchase. You can save the same amount as you would for payments to a lender during those times. The money saved can be used for a large down payment when you are ready to purchase another Car. Your reserve fund can be used to pay for expensive repairs to your vehicle. You don’t need to carry a balance on high-interest Credit cards.

You can sell on your own schedule

You can sell your vehicle anytime you wish, even if you are the owner. Although it is best to keep your vehicle in good condition until you are able to pay the full amount, you can still sell it if you so desire. You are effectively locked in until your lease ends unless someone else takes over.

You can sell when you want and change your vehicle as you need them. Are you expecting a baby? Get rid of your Mazda Miata and get a Honda CR-V. You can keep it forever if you find a Car that is super reliable and suits your needs.

Financing is easier than Leasing

Most consumers find it easier to get a Car Loan than a lease. The process is easier for most shoppers, and the Credit requirements are usually lower for loans. Subprime borrowers are more likely to find financing options than Leasing opportunities, even though they will pay a higher rate of interest.

It is simple to find the best deal on a car-loan. Lenders will work for you with minimal effort, as there are many online lenders that offer streamlined Loan applications and multiple sites that provide multiple quotes in one application. Before you go to a dealership, it’s a smart idea to have a preapproved Loan offer. Although they may be able offer a better Loan than yours, they won’t have the incentive to do so unless they are willing to compete for your business.

COMPANY

DETAILS

REQUIREMENTS

DESCRIPTIONS

myAutoloan

APR Range:1.99% – 27%

Loan Term:24 – 84 months

Loan Range:$8,000 – $100,000

Applicant Requirements:

At least 18 years old, resident of the U.S. (except Alaska and Hawaii), with min. income of $1,800/month and min. Credit score of 500

Vehicle Requirements:

Max mileage of 125,000 miles, 10 years old or newer

myAutoloan presents up to four offers from a variety of participating lenders based on your specific Loan requirements, offering a wide variety of choice and selections.

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LightStream

APR Range:3.34% – 17.49% (AutoPay Discount of 0.50% also included)

Loan Term:24 – 144 months

Loan Range:$5,000 – $100,000

Applicant Requirements:

Must have good to excellent Credit*

Vehicle Requirements:

No restrictions

LightStream caters heavily to applicants with very strong Credit scores, offering a streamlined application process and a Rate Beat program that guarantees they’ll beat any other qualifying offers an applicant receives.

Capital One

APR Range:3.99% – 10.08%

Loan Term:36 – 72 months

Loan Range:$4,000+

Applicant Requirements:

$1,800/month minimum income requirements, resident of the U.S. (except Alaska or Hawaii)

Vehicle Requirements:

Limited to vehicles available through the Capital One network of dealers

Capital One offers a pre-qualification, which allows you to take your offer to any participating dealer within 30 days.

Chase

APR Range:4.29% – 24.99%

Loan Term:48 – 72 months

Loan Range:$4,000+

Applicant Requirements:

At least 18 years old

Vehicle Requirements:

Limited to vehicles available through the Chase network of dealers, no older than 2008

After your application is approved, Chase will send the information to the dealer you choose. The offer is good for 30 days.

Bank of America

APR Range:3.49+%

Loan Term:12 – 75 months

Loan Range:$7,500 – $100,000

Applicant Requirements:

At least 18 years old (19 in Alabama or Nebraska) U.S. resident

Vehicle Requirements:

Max mileage of 125,000 miles, 10 years old or newer, valued at $6,000+, plus additional restrictions

Bank of America Preferred Rewards clients can receive an interest rate discount of 0.25-0.50% depending on their tier at the time of applying for an Auto Loan.

Disclaimer: All information provided here is based on Annual Percentage Rate estimates from the websites of the individual lenders on 12/18/2018. It is not a binding or guaranteed Loan offer. Individual Auto Loan rates will vary.

Notes: In compiling this data, we used new-car purchase rates for Virginia.

*To meet LightStream’s standard for good Credit, you must have several years of Credit history with a variety of account types, including Credit cards, installment debt (vehicle loans), and mortgages. LightStream also prefers to see few, if any, delinquencies and a history of savings, evidenced by things like deposit accounts and manageable revolving Credit card debt. You’ll also want to provide proof of stable and sufficient income to repay current debt obligations as well as any new Loan with LightStream.

Refinancing Can Save You Money Down the Road

With a lease, the payment you have when the contract starts is the payment you’ll have throughout the lease term. With Car financing, you can refinance the Loan to lower its interest rate and monthly payments or change its duration. While it’s generally not a good plan to lengthen your Loan by refinancing, shortening its term can save you a tremendous amount of money.

Refinancing a Car Loan is an excellent idea for buyers who had iffy Credit when they first took out the Loan, but have a couple of years of making their Loan payments on time to boost their Credit score. According to the Credit bureau TransUnion, Car owners who refinance their Car loans lower their interest rates by an average of 2.4%.

Compare Auto Loan Rates

View rates for new cars, used cars, or refinancing. Get four offers so you’re prepared before you visit the dealer.

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You Can Fix it … or Not

Leased cars must be returned in as close to their original condition as possible. When you own a Car, you can repair damage or mechanical issues on your own schedule or when your budget allows. You’re not limited to expensive factory parts, though using aftermarket parts can affect your warranty coverage.

While it’s never a good idea to let collision damage go unrepaired, as small problems can become bigger ones, it’s up to you to decide when and where to get the work done.