Vehicle Finance Advice

Although some people can afford to walk into any dealership they choose and plop down a cashier's check for whichever car strikes their fancy, most of us have to finance. When you finance a vehicle, you essentially take out a loan for the price of the car, minus whatever you give the dealership as a down payment, and you pay interest for the life of that loan, be it two years or five.

If you have to finance a vehicle, however, preparation is necessary to ensure you get the best deal on the car of your dreams - or, at least, the best car you can afford. Without researching your options and taking the advice of those more experienced than you, it's possible that you'll pay more for the car than necessary. Even worse, if you find that you can't make your payments, you could wind up on the wrong end of a repossession.

To Lease or To Own?
There are two main vehicle finance options that you should consider before heading to the local dealership. The first is to purchase the car by financing through an underwriter; the second is to lease the car for a specific period of time. Both of these options are equally viable, but your decision will depend on what you want to get out of the car.

If you want to finance a vehicle to keep as your own for the life of the car (or for several years), it's best to purchase it by financing rather than to lease. Reason being, if you decide to purchase at the end of a lease term, you'll most likely wind up paying far more for the car than if you'd set up a financing plan to begin with. If, however, you plan on trading the car in for a newer model in two or three years, leasing might be the better choice.

You should know, however, that if you do decide to lease a vehicle, the "buyout" rate in your contract is frequently negotiable. If you don't think you can afford it but you want to keep the car, try haggling with the dealership.