Leasing and financing are two of the most common options when it comes to purchasing a vehicle. In most cases, leasing offers a number of advantages such as cheaper recurring payments, ability to switch models more easily and also included maintenance packages. However, leasing effectively means that you’re renting the vehicle. This limits what you can do with the vehicle and you’ll even have strict mileage limits that prevent you from using it too much.
If you want more freedom with your vehicle and peace of mind knowing you actually own the vehicle, then we suggest financing your vehicle instead. You can modify it, drive it where you want and even sell it if you want to. It even works out cheaper at the end if you don’t plan on constantly switching your main vehicle. Another good reason why financing is popular is that it gives you the option of comparing different insurance costs to find the best deals available.
General information about getting a loan
Getting a loan is a heavy financial investment if you’re buying a vehicle. You could be borrowing $20,000 or more to purchase a brand new car and, depending on your loan terms, you could be expected to pay anywhere from $300 to $600 per month. That’s a lot of money for most people and if you’re committing to 3, 5 or more years, you need to ensure that you’ve got the financial security required to make those payments.
There are a number of different loan options that could be more suitable for your current financial situation, such as secured loans that require collateral (usually the car itself) but come with lower interest rates.
What do I need before I apply?
There’s a bit of documentation that you need to put together before you decide to borrow a vehicle.
- Proof of identity is required. If you can’t prove who you say you are, no lender is going to approve your loan. You’ll typically be asked to provide 100 points of identification. This is a mix of documents such as a birth certificate, driver’s license and your passport.
- Proof of residence helps to confirm your address. This is usually a utility bill or tenancy agreement.
- Proof of savings will prove that you can not only earn money but also save it and ensure that you’re capable of paying back your lenders. This might involve bank statements or proof of your assets and savings.
- Proof of insurance shows that you have comprehensive protection from being suddenly hit with a damage claim which could make it difficult for you to repay the loan.
- Proof of liabilities will help lenders understand your current financial situation and any outstanding debts to get a better idea of your financial situation. This could include things such as loan agreements or credit card statements.
In addition to these documents, you’ll also want to bring some details regarding the car you want to purchase. This will help lenders identify how much you want to borrow and what you’ll be purchasing.
Applying for a car loan
Applying for a car loan is fairly straightforward. All you need to do is visit our application page and fill in your details. Once submitted, one of our friendly representatives will be in touch to confirm your details.
You’ll want to put together any relevant documents that we’ve listed above to help make the application process smoother. If you’re unable to provide some of the important documents, such as your proof of identity, then we’ll be forced to reject your application. If you’re unsure about the documents you need or have questions, feel free to contact us for more information.
While a car loan might be slightly more expensive than leasing a car, you’ll have more peace of mind knowing that you are not limited in the way you can drive, the modifications you can make to the vehicle and that you actually own it. The real benefit of leasing is being able to drive the latest models at a much lower monthly cost, but keep in mind that it’s effectively renting and you do not own the vehicle. This alone is enough to put off many people when it comes to buying their first car or swapping their vehicle for a new one.
