Choosing how to finance your new car is not easy. Classic credit or rental with option to buy? If the two options each have their advantages, how do you decide between them when signing the order form? Follow our advice.
Classic credit: the question of possession
With a classic loan, you agree to finance the full price of the car in exchange for paying higher or lower monthly payments each month. This mode of financing allows you to be the real owner of the vehicle, unlike the LOA (lease with option to purchase), which makes you a simple user paying rent.
Classic credit you offers the freedom to keep your car as long as you want, whether for the duration of your credit repayment or for longer. You are not committed to a return date for your future automobile. Likewise, you will be able to resell it before the end of the credit to buy another model. This gives you more flexibility compared to the future.
The vehicle belonging to you, you can use it as you see fit, without having to respect the maximum mileage. However, if you are a heavy roller, its value will decrease by as much on the day it is resold. The maintenance cost will also be higher, and you will not be able to establish a precise budget in advance.
Freedom comes at a price at the cost of managing the entire life of your car. Beyond the 2-year contractual warranty, you will have to pay for any repairs, unless you take out an extended warranty.
With the LOA, control your car budget
Leasing with an option to buy also has several advantages. Instead of having to fully finance your future vehicle, you only pay the estimated discount for the duration of your engagement. So you only pay for its use and not for its possession. This is a big advantage when choosing a model.
Premium brands keep better resale value despite their higher purchase cost. You will therefore be able to drive in a major brand car rather than in a “more popular” vehicle for an almost similar budget. However, you will have to return the vehicle at the end of the contract or exercise the purchase option to acquire it.
The gray card will be drawn up in the name of the organization financing the project. You will therefore not be the owner, but the tenant. This removes the hassle associated with reselling the vehicle. All you have to do is return the vehicle at the end of the contract. With the LOA, you will have to respect an annual mileage. In case of exceeding, additional costs will be invoiced to you, but without surprise since the cost is mentioned in the conditions of the offer.
So, right from the start, you know the exact cost of your car over the next few years. Rental offers with an option to purchase often include the maintenance contract. Everything is included. You can estimate your car budget with Agilauto’s LOA simulation.
In conclusion, the LOA allows you to enjoy a new car at the best price, without worrying about its resale. You will just have to estimate the mileage you will cover during the term of the contract.
