Do you lease a vehicle or know someone who does? We’ll go out on a limb and say you chose this option for low monthly payments on a better make and model than you could otherwise afford.
With leasing, you avoid the hazards of driving an older vehicle. The down side, however, is that leases have rules... lots of them. From insurance requirements to prepayment penalties, there are costs to leasing that buyers avoid. It can also be a hassle to return your vehicle at the end of your lease.
What if you could get that low payment without a lease? With the Better Than a Lease loan from Hanscom FCU, you can! Rather than leasing a vehicle owned by someone else, you buy the car and it’s titled in your name. Let’s take a closer look at how this option may be the right one for you.
Is There a Better Option Than a Car Lease?
Once you know the basics of buying vs. leasing, you’ll probably prefer one over the other. Maybe you like the feeling of ownership that a loan offers you. Or maybe you prefer a new car every couple years, in which case a lease is just the ticket.
Hanscom FCU's Better Than a Lease loan gives you the best of both options. With this type of loan, you own the car, but you make lower payments than with a traditional loan. You also avoid some of the out-of-pocket expenses that come with a lease. And get this: Better Than a Lease is for used cars up to 5 years old, too!
How do you avoid these higher costs? Because you own the car, you don’t pay a security deposit. During the loan, you pay only for the depreciation, or the amount of the vehicle’s value you use. Monthly payments are typically 30% lower than a conventional loan with the same term. That’s because, like a lease, you only pay for the value of the car you use.
At a glance, Better Than a Lease offers the following features:
- Lower payments compared to traditional "loan to own" contracts.
- You could then use the difference to increase your monthly cash flow or pay your car insurance.
- A low or no down payment saves on initial out-of-pocket costs. There's no security deposit and no initial fees.
- No penalties for early payment and you won’t pay charges for normal wear and tear at the end of your term.
- Flexible Terms include 7,500, 10,000, 12,000, 15,000 or 18,000 annual mileage allowance options.
Better Than a Lease works for new or used vehicles, with terms from three to five years. Like we told you...it's better than a lease!
Here's another great perk. Since dealer leases are based on the manufacturer's suggested retail price, you have more freedom to negotiate the best deal with Better Than a Lease.
What Can I Do After a Better Than A Lease Term Ends?
Once your loan term ends, you have a few choices:
- Return the vehicle, paying only for excess mileage and unrepaired damage or missing original equipment.
- Refinance the remaining balance into a traditional loan.
- Sell the vehicle on your own, pay off the remaining balance, and keep any profit.
- Trade in the vehicle and realize any equity you have built up.
Vehicle ownership does have risks. You will probably want to have GAP insurance in the event of a total loss of the vehicle before you finish the term. If there is more depreciation than predicted, you will have less equity to work with.
But the opportunity to drive a better make and model than you could otherwise afford, combined with the freedom to choose your option at the end of the term, make the Better Than a Lease Loan an attractive option for both buyers and lessees.
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