Car loans

If you’re just going to let that cash sit there gathering dust in a checking account => then go ahead and automate your cash flow. Just dump it back in immediately.
But look, if you actually have a plan for that money—if you’re planning to put it to work, invest it, and actually grow it faster than the interest you're bleeding out on a loan => then by all means, grab that credit.

For individuals, taking out a lease just doesn't make much financial sense.

Maya the Bee said:Could you elaborate a bit on why it wouldn't be worth it?

The main issue is that leasing usually ends up being more expensive than just taking out a standard loan. On top of that, you aren't actually gaining ownership of what you're paying for, yet you're still footing the bill for the usage. In my view, opting for a traditional loan is generally a smarter move than leasing.
That said, leasing makes a lot of sense for large corporations or manufacturers because it helps them manage cash flow without having to tie up massive amounts of capital all at once.

kokoshka said:Leasing typically carries a higher premium than standard financing, such as a conventional loan. Furthermore, you aren't actually acquiring ownership of the asset through a lease, yet you are still footing the bill. In my estimation, opting for a traditional loan is the more logical path over leasing.
For corporations, however, leasing is perfectly viable—as is it for manufacturers and similar entities—primarily because it avoids the necessity of deploying massive amounts of capital all at once.

Personally, I would much rather have some liquidity left over than exhaust my cash reserves. My monthly payments would be $2,400 over a two-year term, and upon paying that final installment, full ownership is transferred to me. There is also the option for early payoff, which is supposedly just a formality involving a small fee. With a standard bank loan, they demand either a co-signer or a life insurance policy, and you are effectively barred from selling the asset since the bank holds the title. Thank you.

Maya the Bee said:Personally, I prefer this over a straight cash purchase because it keeps some liquidity in my pocket for other things. For a two-year term, the payments come out to $2,400, and once that final installment is cleared, you officially own the item. Apparently, there’s an option to pay it off early too, though it might involve a small fee. If you were to go the traditional loan route instead, you'd need a co-signer or life insurance coverage. Plus, you can't sell the item outright while the bank holds the title. Thanks.

Where did you get that bolded part? With a lease, you don't actually own the asset unless you choose to buy it out after the last payment—which usually happens at a discounted rate, but even then, it often ends up costing more in the long run.

kokoshka said:Where on earth did you get that bolded part? You don't actually own the asset through a lease; you only gain ownership if you buy it out after that final installment—usually at a discount, though even then, it still ends up costing you more in the long run.

"A Wells Fargo, once they purchase the leased asset, continues to invoice the lessee—essentially selling it to them via installments—while retaining legal ownership until the debt is fully settled. In practical terms, this means the user can record the asset on their balance sheet as an owned resource based on the invoices provided by Wells Fargo, even though title doesn't officially transfer until the very last payment is made. This isn't a standard rental agreement; it is a sale structured through installment payments, which is why the monthly fees are calculated differently." according to Chase Bank

Maya the Bee said:"A leasing company, once they've acquired the asset, continues to invoice—essentially selling it to the lessee—but under an installment plan where the lessor retains ownership until the final payment is made. In practical terms, this means the user records the leased item as an asset on their balance sheet based on the invoice received from the leasing firm, though legal title doesn't actually transfer until that last monthly payment clears. It’s not quite a rental agreement; think of it more as a purchase via installments, which is why the way those monthly fees are structured differs." from the Chase Auto Finance website

That's actually a different type of leasing altogether. I was under the impression you were talking about standard financial leasing. My bad, sorry.😍

So, I’ve got a question about picking up a new car. Basically, I don't want the title in my name, so I was looking into leasing options. I’m thinking about going with an operating lease as an individual—the monthly payments look a bit lower than what a standard loan would run me, which seems like a total win to me. I already checked in with Chase to see what the deal is. What do you guys think? Are there any hidden catches or fine print I should be worried about?

Is there any bank, dealership, or even just some lender out there... that lets you finance something without demanding a three-month pay stub average?

So, here's the deal—I just landed a permanent gig, and honestly, the salary is more than enough to cover the loan I'm looking at. But since I've only been on the job for two months, I'm wondering if anyone has actually managed to score an auto loan (or even just a personal loan) without showing a solid three-month history?

Thanks!

I know this thread is pretty old, so I hope nobody minds if I jump in here.

I’m actually looking into some options myself, so I was wondering if anyone could share their experience with auto loans versus leasing.

Let's say we're talking about a brand new car priced at $50 on a 7-year term.

What's the actual difference in the long run—like, how much am I really paying back to the bank or whoever—when comparing a loan (where interest usually sits around 8-9%, meaning you end up paying back roughly 200% of the principal) against a lease? I guess, how does the math typically work out with leasing?

I’ve got a feeling there might be some 7-year leasing options out there somewhere

If you actually sit down and compare the monthly payments, I honestly think the leasing rates end up being higher

The thing is, for the entire duration of the lease, you aren't actually the owner of the vehicle; once the term hits its end, you’re stuck either handing the car back or coughing up more cash to buy it out.

With a standard auto loan, once you've paid it off, the car is yours to do whatever you want with—you can sell it, because it belongs to you.

Companies jump on leasing for all sorts of reasons, whether it's to keep certain liabilities off their balance sheets to make their financial health look better, or just to take advantage of that immediate tax deduction on sales tax.

Personally, I don't see any logical reason why an individual would opt for a lease, unless their credit score is absolutely trashed and they have zero other options...

I'm thinking about picking up a new ride soon. My plan is to drop about half the cash upfront and then finance the rest.
What kind of loan should I actually be looking at? Is it better to just grab a specific auto loan, or would a general personal loan be the smarter move here?

Morgan Gray3 said:I'm thinking about picking up a new ride soon. My plan is to drop about half the cash upfront and then finance the rest.
What kind of loan should I actually be looking at? Is it better to just grab a specific auto loan, or would a general personal loan be the smarter move here?

It all comes down to the terms and the actual math.

A personal loan—check the interest rates first, but the upside is you own the car outright, so you can sell it whenever you want without anyone breathing down your neck.
An auto loan—again, check the rates, but keep in mind the bank usually holds a lien on the title. That means if you try to sell it later, you're dealing with extra red tape.

Just weigh your options and see what fits your situation better.

Some banks will cut you a deal on car loans where if you're keeping it under $5,000, they don't even bother putting a lien on the title. Once you cross that threshold, yeah, they'll claim ownership. Honestly? Just go for a dedicated auto loan. The interest rates are way lower than whatever junk you'll get otherwise.

I mean, I assume they’re looking for some kind of collateral or security measures; co-signers, guarantors...

Honestly, I don't know, I usually lean toward an unsecured loan. Sure, the interest rate might take a bit more of a bite, but you aren't getting hit with all those extra fees—which, let me tell you, add up fast—and you don't have to worry about the bank holding your car hostage under some fiduciary lien.

Kimberly Nguyen said:I mean, I assume they’re looking for some kind of collateral or security measures; co-signers, guarantors...

Honestly, I don't know, I usually lean toward an unsecured loan. Sure, the interest rate might take a bit more of a bite, but you aren't getting hit with all those extra fees—which, let me tell you, add up fast—and you don't have to worry about the bank holding your car hostage under some fiduciary lien.

I'm voting for unsecured too. I’ve been crunching the numbers for a new ride and I need maximum flexibility with my monthly payments. I don't want to deal with co-signers or having my paycheck garnished if things go south. I want minimal paperwork and zero headaches, which basically means going the unsecured route.

By the way, quick question... there's a decent chance I'll have enough cold hard cash in a year to just buy the car outright. Do dealerships actually give discounts to people paying cash versus those financing through a bank? Is it possible to negotiate a lower price or maybe throw in some extra features for the same cost, or am I wasting my time?

It’s totally doable to either get them to shave a bit off the price—you know, that whole "let's negotiate the contract terms" dance—or just insist they throw in some higher-end equipment instead

but you really have to be the one to push for it, because you've got to play as hardball as they do... there's honestly no shame in being a little ruthless when it comes to these things 😉

If you’re saying it makes more sense for corporations to go with leasing, does that same logic apply to small business owners—is a loan actually better than leasing?

Just a heads up: I'm in my first year, so I'm not even registered for sales tax yet.

Mark Sullivan62 said:I’ve got a feeling there might be some 7-year leasing options out there somewhere

If you actually sit down and compare the monthly payments, I honestly think the leasing rates end up being higher

The thing is, for the entire duration of the lease, you aren't actually the owner of the vehicle; once the term hits its end, you’re stuck either handing the car back or coughing up more cash to buy it out.

With a standard auto loan, once you've paid it off, the car is yours to do whatever you want with—you can sell it, because it belongs to you.

Companies jump on leasing for all sorts of reasons, whether it's to keep certain liabilities off their balance sheets to make their financial health look better, or just to take advantage of that immediate tax deduction on sales tax.

Personally, I don't see any logical reason why an individual would opt for a lease, unless their credit score is absolutely trashed and they have zero other options...

Look, what if the leasing terms are actually better? Personally, I’m not one of those people obsessed with the concept of "ownership." To me, the "right to use" the vehicle is what matters. 😉 And you get that whether you finance it or lease it.

I’m curious about something else—how does registration and the title work? If the car isn't technically in my name during the lease term, does that mean I can, say, register it in San Francisco or out in the suburbs, provided I coordinate with the leasing company? 😉 It makes sense to me because I've never actually owned a car in my own name. Because of that, I don't get any insurance or registration discounts. Plus, registration and insurance fees are, for example, cheaper in the suburbs than they are in Washington, D.C., for the car I'm driving now (which is currently under my mother's name) 🙂 the difference (with the discount) is $300! It’s not a fortune over the course of a year, most would say, but I’d rather save that money or put it into an investment. 😉
Thoughts?

Kimberly Lopez65 said:Look, what if the leasing terms are actually better? Personally, I’m not one of those people obsessed with the concept of "ownership." To me, the "right to use" the vehicle is what matters. 😉 And you get that whether you finance it or lease it.

I’m curious about something else—how does registration and the title work? If the car isn't technically in my name during the lease term, does that mean I can, say, register it in San Francisco or out in the suburbs, provided I coordinate with the leasing company? 😉 It makes sense to me because I've never actually owned a car in my own name. Because of that, I don't get any insurance or registration discounts. Plus, registration and insurance fees are, for example, cheaper in the suburbs than they are in Washington, D.C., for the car I'm driving now (which is currently under my mother's name) 🙂 the difference (with the discount) is $300! It’s not a fortune over the course of a year, most would say, but I’d rather save that money or put it into an investment. 😉
Thoughts?

I highly doubt you'll find any better terms through a lease than a traditional loan.

First off, you’re going to have to shell out a down payment in cash, and let's be real, that’s definitely not going to be less than 20% of the car's value. Plus, you’ve got that residual value hanging over your head at the end of the lease term; that could easily be around 20%. Your monthly rent hike will likely be right in line with a loan payment, or maybe even higher. And don't forget, with a lease, you're only paying off about 60% of the total vehicle value over the term, whereas with a loan, you're covering the whole thing.

Also, I think you’re going to be pretty disappointed at the end of year five when the lease expires and you realize you’ve just been paying rent this whole time—just paying for that "right to use" it. Basically, once that five-year lease is up, you’ve got nothing to show for it; the car isn't yours, and you can't sell it. When you compare the sum of the lease payments against the total cost of a loan, the numbers will probably end up being very similar. But with a loan, you actually own the car, meaning you can sell it and walk away with some cash. Even if you opt for a lease-to-own setup, you still have to pay that residual value (that ~20% I mentioned), which, if you ask me, makes zero sense financially. If it were actually a good deal, considering how many cars Americans buy every year, way more individuals would be jumping on leases, but they aren't—so why do you think that is? Seriously, go grab a quote for a lease payment versus a loan payment and compare them yourself.

Furthermore, don't forget that with a lease, you’re forced to carry full comprehensive insurance for all five years. If you buy a car with a loan, you’ll probably handle the insurance yourself, but you'll likely only stick to the heavy coverage for the first year or two, right? I highly doubt anyone wants to be paying premium comprehensive coverage for a car that’s already 3-$1333 years old... people just don't do that.

And another thing: leasing companies push you hard to use their authorized dealerships for service, and man, that is expensive. As an actual owner, once your warranty expires, you get to choose exactly where you want to take your
vehicle.

Since you aren't the legal owner under a lease, you don't even get a say in where the car is registered. The car gets registered in the jurisdiction where the leasing company is headquartered. Most of them are based in major hubs like New York City. And in places like NYC, registration and insurance are the most expensive. The leasing company might give you power of attorney to handle the registration yourself, but not in the location you actually want.

Look at all those massive corporations with fleets of company cars headquartered in NYC but with branches all over the US—notice how all those vehicles have New York plates? That’s not a coincidence.