Finance a Vehicle
Finance a Vehicle
How much are Loan Payments?
Loan payments are primarily based on the duration of the loan and the amount you need to borrow. If you want smaller payments, then extending the length of the loan from 48 to 60 months might make sense. Alternatively, if you can make a bigger cash payment up front your payments and financing cost will decrease.
A fixed payment plan is essential in vehicle financing. It allows dealers to take on more risk for a lower rate. For customers, it allows them to purchase a more expensive vehicle than if they had to save money to pay the entire cost upfront.
How much are Lease Payments?
Lease payments depend primarily on the amount of depreciation the vehicle will undergo while it is on lease and the cost to borrow money. First, the real cost of the vehicle is determined by establishing the market price and adding/subtracting any costs/deductions incurred in the sales process. Next, the expected residual value of the vehicle at the end of the lease is determined. When this number is subtracted from the real cost of the vehicle now, you get the amount that needs to be depreciated. Finally, a number is determined that reflects the cost of borrowing money over the life of the vehicle.
Lease or Buy?
Ultimately, this is a question of preference. Some people prefer to drive a newer vehicle all the time while others prefer to own. There are pros and cons to both trains of thought, but it isn’t black and white.
Some of the benefits of leasing include:
- Lower monthly payment
- Always driving a newer vehicle
- Less repair/maintenance cost
Some of the benefits of purchasing a vehicle include:
- Active investment in an asset
- Eventually payments will end
- You own your own vehicle
Contact Langley Hyundai
If you have any other questions about vehicle financing, or you want to arrange a test drive, contact Langley Hyundai today! We are in Langley at 19459 Langley Bypass – drop-in any time.