Financing or renting? Advantages and disadvantages

Financing or renting? Advantages and disadvantages

When it comes to buying a vehicle, there are many questions to ask yourself before taking the plunge. Type of vehicle, private or professional use, New or second hand, Cash payment or financed. In addition, other options that do not involve owning the car have now been added . This has created a new question that has become one of the most recurrent: financing or renting.

The truth is that, although cash payment is very widespread in many countries, it is made mainly for second-hand vehicles with affordable prices. It is within the reach of few pockets to get a new car by paying the full amount at the time of purchase. For this reason, Simply Finance cars have been the most feasible option for a brand new car, something that has also been favored by the striking offers that are found in exchange for financing. However, currently there are other options such as renting, which try to find their place and, also, eat ground to traditional solutions.

When to finance the car

Many are already more than used to financed purchases. From the mortgage of the house to the car, going through electrical appliances, cameras, game consoles … It is not only an option for those who cannot pay the total amount, but there are many people who prefer to distribute the payments in different installments.

The financing involves a series of monthly fixed fees and, in some cases, an initial and final payment. As it is a loan, the interest to be paid is included in this series of terms . Therefore, the final price should be higher than the price offered in cash.

However, in recent years exclusive offers have become popular for those who finance the purchase . These promotions are offered by financiers associated with the brand itself. In this way, this price reduction is offset by interest . For this reason, it is very important to study the offer in depth to know if it is interesting or if you can get a better price by paying in cash or by resorting to a bank or traditional finance company .

Buying a financed car implies owning the vehicle , with all that this entails. In this way, the owner must take care of all the expenses: insurance, taxes, maintenance, gasoline… In the same way, the owner can sell the vehicle at any time and thus recover part of the investment.

When to choose renting

Renting is gaining market share by leaps and bounds. Although at first it was seen as an almost exclusive option for professionals, renting for individuals is already a reality and a highly recommended alternative for certain cases. In the case of renting, there is no initial or final payment . It all comes down to a monthly fee for the duration of the contract. This rental usually lasts between two and five years. The duration, the type of vehicle or the maximum annual kilometers are some of the aspects that can increase or reduce the quota.

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