Let’s Talk Leasing Vs. Financing: A Simple Guide To Your New Ride

Let's Talk Leasing Vs. Financing: A Simple Guide To Your New Ride

Key takeaways:

  • Leasing a car is essentially renting it from the dealership for a specified period.
  • Car financing is taking out a loan to purchase the car outright.
  • The critical difference between leasing and financing is that you will eventually own the car when financing, while you will have to give it back to the dealership at the end of the lease agreement.

Choosing between financing and leasing a car is crucial when planning to get a car. Do you want to save money for a down payment and finance the remaining amount to buy your vehicle? Or would renting a car be a better option?

In this blog post, Auffenburg Hyundai of Cape Girardeau will guide you about leasing vs. financing to make the right choice for your requirements.

Car Leasing: Definition

When leasing a vehicle, you pay to use it for an extended period (usually two to four years). The leasing company remains the car’s legal owner during the lease term.

You make monthly payments to the dealership or leasing company during the lease. Since you’re only paying for the car’s depreciation value while you drive it, plus interest and fees, these payments will be cheaper than if you were to finance the purchase of the vehicle.

You’ll have three options at the end of your lease term. You can buy the car outright, lease another vehicle, or turn in the keys and walk away.

Car Financing: Definition

Car financing involves borrowing money from a financial institution to pay for your vehicle. The lender will receive monthly payments from you, with interest and fees. You will have full possession of the car after the loan is repaid.

Car Financing: Definition

Differences Between Leasing and Financing:

Difference 01: Ownership

While leasing, you don’t own the vehicle; the leasing company retains the car’s ownership unless you decide to purchase it at the end of the lease. If you choose to buy the vehicle at the end of the lease, you will be responsible for any damage that has occurred during the lease and any additional wear and tear. You will also need to pay any remaining balance on the car loan.

Financing a car gives you ownership of the vehicle once the loan is paid in full. You can sell the car, trade it in, or keep it for as long as you want.

Difference 02: Monthly Payments

Since you only pay for the car’s depreciation during the lease term, along with interest charges (also known as rent charges), taxes, and fees, lease payments are lower than loan payments.

The car loan payments are often larger than lease payments because you pay off the car’s total purchase price, plus interest and other finance charges, taxes, and fees.

Difference 03: Upfront Costs

The upfront cost of leasing a car may comprise the first month’s payment, a refundable security deposit, a down payment (like a capitalized cost reduction), registration charges, taxes, and other expenses due upon lease signing or delivery.

The initial costs of financing a car include the down payment, security deposit, first month’s loan payments, and acquisition fee. The down payment typically equals 10% of the car’s purchase price, and the security deposit usually equals one monthly payment.

Difference 04: Early Termination

Early termination of a car lease may be penalized by a fee. This fee is typically several hundred dollars but can be as high as several thousand dollars. Sometimes, the lessee may be required to pay the remaining lease balance. Early termination fees are designed to discourage lessees from terminating their leases early.

Paying off an auto loan early will save you money in interest. The sooner you repay the loan, the less interest you will pay. Paying off a loan early may also help improve your credit score.

Differences 05: Vehicle Return

When the lease expires, you turn in the keys and walk away unless you exercise your purchase option. If you decide to lease again, you’re back at square one with nothing to show for your previous payments but memories.

If you finance a car, it’s yours to keep, drive until the wheels fall off, or sell whenever you want.

Difference 06: Future Value

The future value of a leased car is essential because it determines how much you’ll pay at the end of your lease if you decide to purchase the vehicle. Lease contracts typically specify an estimated future value for the vehicle, called the residual value.

The future value of a financed car is whatever you can get for it when you sell or trade it in. If you own the car, you can sell it, trade it in, or keep it until it’s no longer drivable.

Difference 07: Mileage Restriction

Most leases include mileage restrictions; these range from 10,000 to 12,000 annually. (You might negotiate for a higher mileage cap.) You’ll pay penalty fees if you go above your limitations.

With finance, there is no mileage limit. You are free to travel as far as you choose. However, remember that increased mileage reduces the car’s trade-in or resale value.

Difference 08: Excessive Wear and Tear

When you lease, you’re responsible for keeping the car in good condition and repairing any damage that exceeds normal wear and tear. This is usually defined in your lease agreement. You might have to pay fees if you turn in the vehicle with excessive damage or missing parts.

With financing, it’s up to you whether or not to repair damage to the vehicle. Of course, you’ll still want to keep it in good condition, so it holds its value, but you won’t be penalized for everyday wear and tear the way you would with a lease.

Difference 09: Customization

You may be restricted in the amount of customization you can do to a leased vehicle. Any alterations or unique components you install must be taken out since the car must be returned in a resalable condition. If there is any remaining damage, you will have to pay to have it or submit an insurance claim, which would require you to pay a deductible.

With a financed car, you can do whatever you want with it! Want to add a spoiler or a new paint job? Go for it! These customizations can even increase the resale value of your vehicle.

Ending Note

Whether you should finance a car or lease one depends on your requirements and preferences. Leasing is generally the best option if you want a reduced monthly payment and don’t mind returning the vehicle. However, financing is probably the better option if you’re looking to build a vehicle’s equity or want more customization freedom. Regardless of the path you take, make sure to shop around to find the greatest value.

The financing experts at Auffenberg Hyundai of Cape Girardeau, serving Tamms, IL., can work with you to create a loan plan that meets your needs, regardless of your credit condition. We can arrange financing for all credit levels because of our expertise in working with various financial institutions.

Get Financing for a New Car!

2022 Hyundai Veloster N exterior side view

What are the Safety Features Available in the 2022 Hyundai Veloster N?

Safety Features of the 2022 Hyundai Veloster N

Since its debut in 2012, the Hyundai Veloster N has been creating sports hatchback fans worldwide. Funky, sporty, and fun to drive, the 2022 Hyundai Veloster N is the sportiest Veloster in the brand’s line-up. With a series of standard inside-out elements and innovative technology, this three-door hatchback is a thrill ride available at an affordable price. And thanks to its turbocharged engine and front-wheel drivetrain, driving the hatch is an absolute delight in town or off-road. Want to know what features keep you safe inside such a powerful hatchback? Keep reading this article by Auffenberg Hyundai of Cape Girardeau in Cape Girardeau, MO, and explore the safety features of the 2022 Hyundai Veloster N.

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A Rookie’s Guide To Radiator Fluid: Antifreeze Vs. Coolant

A Rookie's Guide To Radiator Fluid: Antifreeze Vs. Coolant

Key Takeaways:

  • Radiator fluid helps transfer heat away from the engine and prevents overheating.
  • Antifreeze has many benefits, including preventing engine freezing and corrosion.
  • Coolant prevents your radiator from overheating.
  • Antifreeze and coolant also help lubricate the water pump so it can continue to move the coolant efficiently.
  • Radiator fluid is typically ethylene glycol-based and needs to be replaced every two years or 30,000 miles or two years.
  • Auffenburg Hyundai of Cape Girardeau offers quality car repair and maintenance services to customers in Chaffee, MO, and the surrounding areas.

When it comes to car maintenance, the radiator fluid is one of the most important things to know about. It keeps your engine cool, and it also helps to prevent freezing in cold weather. There are two broad types of radiator fluids. Antifreeze is developed to lower the freezing point of water, while coolant helps to regulate the engine temperature. Auffenburg Hyundai of Cape Girardeau will discuss the differences between antifreeze and coolant and how to choose the right type of radiator fluid for your car.

Radiator Fluid

When choosing a radiator fluid, it is essential to consider the climate in which you will be driving your car. If you experience cold winters in our area, you will need to use a radiator fluid that has a lower freezing point. Conversely, if you live in an area with hot summers, you will need to use a radiator fluid with a higher boiling point.

Radiator fluid is available at most car dealerships and auto parts stores. Following the packaging instructions is essential when adding radiator fluid to your car. Overfilling the radiator can cause damage to the engine, so it is crucial to add the liquid slowly and carefully.

If you are unsure which fluid type is best for your car, consult a local car dealership or auto parts store professional. They will be able to help you choose the right product for your vehicle and climate.

Antifreeze vs. Coolant

Antifreeze is a chemical that lowers the freezing point of water. Antifreeze is used in car radiators to help prevent the engine from freezing in cold weather. Antifreeze is available in liquid and gel form, typically green or yellow in color. Coolant, on the other hand, is a mixture of water and antifreeze that helps to regulate the engine temperature. Coolant is usually red or blue in color.

Benefits of Antifreeze Coolant

There are many benefits to using antifreeze and coolant in your vehicle. In addition to preventing your engine from overheating or freezing, they also help to protect the machine parts against corrosion. They can extend the life of your vehicle by keeping it clean and free of rust and other corrosive materials. They also help lubricate the water pump so it can continue to move the coolant efficiently. The water pump circulates the fluid throughout the engine. The coolant helps to keep the engine at a consistent temperature by absorbing heat and transferring it away from the engine.

Types of Coolant

It’s essential to use a compatible type of fluid in your car. Different car engines require different types of radiator fluids. Be sure to consult your car’s owner manual or a car dealership before adding any liquids to your vehicle.

Most modern cars use an “all-in-one” radiator fluid, a mixture of water and antifreeze. This type of fluid is usually green, pink, or blue in color. You can find all-in-one radiator fluids at most auto parts stores. Here are the basic types of coolant:

1. Ethylene Glycol

Ethylene glycol is a toxic chemical used as an antifreeze in cars and airplane cooling systems. It keeps the water from freezing in cold weather conditions. It also raises the water’s boiling point, so it doesn’t overheat as quickly. It makes the coolant an ideal solution for keeping your engine at a consistent temperature, no matter the outside temperature.

2. Propylene Glycol

Propylene glycol is a thick liquid that comes from plants. It has many different uses, but one of its most common applications involves being used as an ingredient in the coolant. It has a sweet smell.

Why Can’t I Mix Propylene Glycol and Ethylene Glycol?

Never mix ethylene glycol and propylene glycol. They don’t mix well and are poisonous if ingested. They are quite different in terms of fluidity, toxicity, and heat transfer properties. When mixed, ethylene glycol and propylene glycol produce a hazardous by-product that must be emptied, cleaned out thoroughly, and refilled with suitable glycol fluid.

Changing Your Radiator Fluid

As summer ends, now is an excellent time to think about changing your antifreeze and coolant. They help to keep your engine running at an optimal temperature, even in cold weather conditions. It is also essential to change your radiator fluid regularly to prevent corrosion and extend the life of your engine.

Most car manufacturers recommend changing the radiator fluid every 30,000 miles or every two years. However, if you live in an area with extreme temperatures, you may need to change it more frequently. You can check your car’s owner’s manual for specific recommendations to determine when to change your radiator fluid.

If you find that your car’s engine is running hot or the temperature gauge on your dash is reading higher than usual, it could be a sign that you need to add more radiator fluid. Other symptoms that you might need to add radiator fluid include:

  • A sudden drop in coolant levels.
  • Leaks in the radiator or hoses.
  • Discolored (rusty) radiator fluid.

If you need to add more radiator fluid, use the same type of fluid already in your car. Mixing different kinds of radiator fluid can cause engine damage.

Also, please read our article on the signs of a failing radiator to prevent engine overheating.

How to Test Antifreeze Coolant Level and Strength? 

A refractometer or hydrometer test kit can measure the freezing point, boiling point, and concentration of antifreeze in the coolant. This information lets you know if your car’s cooling system is working correctly.

Need Car Maintenance and Repair Services in Chaffee, MO? No Problem!

Auffenburg Hyundai of Cape Girardeau, serving Chaffee, MO, is committed to providing our customers with the best possible service. From car sales and financing to service and parts, we’ve got you covered. Our team is dedicated to making sure your experience at our car dealership is nothing short of exceptional. Schedule a service today or browse our inventory online. We know you’ll find the perfect car for your needs.

Thanks for choosing Auffenburg Hyundai of Cape Girardeau!

2022 Hyundai Tucson Front and Side View

Explore the Infotainment and Connectivity Features of the 2022 Hyundai Tucson

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