By Jon Acuff
Here are some reasons you might want to purchase a car with a loan.
1. Money when you need it
A loan gives you the freedom to make a purchase you need (like a car) now, while spreading the payments out over a manageable period of time in the future.
2. Opportunity to build your credit history
Making timely payments on an installment loan is one way to establish a solid credit history. If you consistently make payments on a car loan, for example, your credit history will grow over time and give lenders the assurance that you know how to manage credit.
3. Credit flexibility
If you've had some financial challenges in the past, you may find that it's difficult to get approved for a lease. In general, loans offer more forgiveness when it comes to your credit history.
Unlike a lease, you build equity in the vehicle and own it outright when you complete the terms of the loan agreement. There can be a great satisfaction in holding your own car title.
5. Wider selection of vehicles
Although used car leasing is growing in popularity, most leasing companies prefer to lease cars that are no more than three years old. What if the model you want is five years old? A loan will open the door to a broader selection of model-year choices.
If you'd like to know more about how a loan could make sense for you, read Loan Basics or 5 Signs You Might Love a Loan. To learn about the lease side of the car financing world, take a look at Leasing Basics.