Financing FAQs: Some pros and cons of getting a loan vs. a lease

Shopping for a brand-new Audi can be a very enjoyable experience, but the enjoyment doesn't have to stop when it's time for the financing. The knowledgeable specialists in our finance center at Audi Nyack in Nyack NY can simplify the financing process, remove the anxiety and replace it with reassurance. We can tell you the pros and cons of a loan vs. a lease, so you can actually enjoy getting a good deal on financing. Here's a brief introduction. 

Which is better: A loan or a lease?

Both have upsides and downsides: The one that's "better" is the one that works best for you. A loan creates a pathway for you to build equity - or cash value - in the car you're buying. With a lease, you aren't building cash value in the car, but monthly payments are lower and you don't have to sell your car at the end of your lease. You could use either one to finance one of our new Audi Q4 models or our new Audi Q3 models .

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What are some advantages of a car loan?

As you make your monthly loan payments, you can gradually own a share of your car. You can use that cash value later to help buy your next car in New City or Pearl River, NY. Keep making payments and you can eventually own that car. A lease usually can't do either of those two things. By making your monthly payments on time, you're improving your credit and gradually raising your credit score, so it's easier to get financing in the future. 

What are some downsides to a loan?

A car loan usually requires 20% of the price of the car as a down payment, or at least 10%. The higher your down payment, the lower your interest rate. Some people don't have that much cash upfront. By contrast, a lease requires less "money due at signing," which is basically a down payment. A car loan also requires a larger monthly payment and some people don't have enough monthly cash flow to afford that as easily.

What are some advantages of a lease?

The #1 advantage of a lease for most people is that the monthly payments are usually lower than monthly car loan payments. So if your monthly cash flow is tight, a lease can help. Another lease benefit is that you don't have to sell your car at the end of your lease - usually after 36 months. You can just drop off your leased vehicle at Audi Nyack, pay for any lease-end damages or mileage fees, lease another car and drive home in a brand-new vehicle.

What are some downsides to a lease?

Except in rare circumstances, you aren't building any cash value in a car when you lease it. A lease is like renting in that sense. If you lease cars all your life, you won't own any of them. In addition, a lease has an annual limit on the number of miles you can drive. Go over the limit as you drive around Westwood or Congers NY and you pay excess mileage fees. You also pay for damage or wear-and-tear that are considered "excess" at lease-end.

Can you use either a loan or a lease to finance a new or used car?

Yes, a loan or a lease can be used for most cars at Audi Nyack. Fill out our simple financing application to see how much you can qualify for. Then browse our new Audi models or our used inventory to find a car that fits your preferences and your budget. We look forward to helping you find and finance the right car soon at Audi Nyack in Nyack, NY.