At I.G. Burton Chrysler Dodge Jeep® RAM of Berlin, we understand that whether you’re in the market for new or used cars, the trickiest part is deciding how to pay. You can buy one outright or choose to lease, but keep in mind the effect leasing can have on your credit.
Buying vs. Leasing: What’s the Difference?
When it comes to paying for your used car, a lease and loan both involve an agreement to a payment plan over a span of time. With a loan, you are most likely going to buy the car at the end of the payment cycle. With leasing, you can either buy the car or give it up and perhaps lease another one.
Are you looking to try a few different types of vehicles over the course of a few years? If so, then a short-term lease arrangement might be for you. If you want something more long-term, consider a loan to buy the car outright.
How Does Leasing Affect Your Credit Score?
Any time you apply for any kind of credit or financing, this information is reported to the three major credit bureaus (Experian, TransUnion, and Equifax). This does not necessarily have a negative impact on your score.
The main impact leasing a used car will have on your credit score revolves around the payments. If you make the loan payments on time, this will have a positive effect on your score.
However, if you run late or default on the debt, your credit score will be negatively impacted. Before you lease a used car, make sure that you will be able to make your payments on time.
For more information on leasing, apply for financing at I.G. Burton Chrysler Dodge Jeep RAM of Berlin. Our team is dedicated to finding a finance plan that works for you!