According to the latest findings, there are currently 263.6 million vehicles in the United States. While that number is incredibly high, there are many reasons why it is reasonable. After all, the vast majority of the metropolitan and continental U.S. is built in a way that makes it impossible to move without some form of vehicle. And while relying on buses, bicycles, and other alternatives can help for a while, most people will eventually realize that obtaining a car is inevitable.
Got All Auto Parts finds that once they come to this conclusion, however, prospective drivers will begin a long and complex journey of acquiring their vehicle. Regardless of the sky-rocketing number of sellers and dealers who they can subsequently resort to, the process will still be fairly tricky as there are countless alternatives. The most common ones, however, include cash purchasing, leasing, and long-term financing of both new and used automobiles. So, which one of these options is the best?
Impossible to Quantify
While it is very clear that each of the ways mentioned above of getting a car has its own advantages and shortcomings, it is borderline impossible to state which one is superior for all cases. The reason why is the fact that some people will find leasing to be the best alternative for their particular scenario while others almost see it as a waste of money. Of course, there is nothing set in stone about any of the three choices, and buyers simply have to get educated enough to understand what would work well for their current situation.
As per the transmission rebuilder and auto part wholesaler, Got All Auto Parts, cash purchasing a vehicle is the most advantageous option when it comes to avoiding interest and immediately taking possession of the asset. Before clarifying, however, it is important to state that “cash” does not just mean buying the car with paper-based dollar bills. Instead, it simply says that the entire purchase price will be paid immediately, whether through bank accounts, wires, cash, or some other method.
So, buyers who will find this option most fitting are those who have a large amount of capital dedicated to a vehicle purchase. In other words, these tend to be people who have been saving for quite some time and currently possess the necessary funds needed to pay the entirety of the asking price accompanied by the sales and registration fees. Doing so will be extremely beneficial as there are no third-party or in-house financing conditions that carry interest rates. Moreover, unlike leasing, the buyer will instantaneously become the owner and receive their ownership title within just a few weeks.
While cash purchasing is probably the cheapest way to own a vehicle in the long run, it is not realistic for many individuals. After all, cars tend to cost more than buyers have accessible at any given moment. Due to this, there is an option to lease a new or used automobile for a relatively low down-payment. Unlike cash purchasing or financing, leasing will never truly transfer the vehicle title to the driver unless they decide to exercise the buying clause at the end of the contract term.
So, the entire program is somewhat similar to long-term rentals where the driver gets to utilize and maintain the car as long as they keep making payments on their lease. Got All Auto Parts reminds that there will usually be some additional fees related to this program. Thus, the overall price of having a vehicle will eventually go beyond the actual asking price that would have been facilitated via cash purchase. Nonetheless, individuals who would like to drive away for a smaller down-payment can easily do so with leasing!
Finally, the most popular option in the U.S. is financing. In most aspects, this route is identical to leasing except the ownership and down-payment considerations. In translation, someone who is financing a new or used car will ultimately be the legal owner once the totality of the loan has been paid off. To be considered for financing, however, many additional requirements have to be fulfilled. For instance, the down-payment will be much higher as lenders seldom give out loans that are not backed up 20 percent or more of the principal amount.
Moreover, those who have poor credit rating and unreliable spending history will ordinarily find it impossible to get loans or favorable terms. That means that this option is somewhat limited to buyers who can prove financial power actually to make timely payments over the life of the loan. Lastly, the APR (interest) tied to financing a car is going to be much higher than any other fees charged with cash purchases or leasing. This is because the interest percentage is directly related to one’s credit and, unfortunately, the scrutiny in this area is practically unparalleled by any other buying method.