Disclaimers

1152 Marina Blvd, San Leandro, CA 94577
3396 Stevens Creek, San Jose, CA 95117
25601 Mission Boulevard, Hayward, CA 94544
1066 Marina Boulevard, San Leandro, CA 94577
543 El Camino Real, Redwood City, CA 94059
543 El Camino Real, Redwood City, CA 94059
1066 Marina Boulevard, San Leandro, CA 94577
25601 Mission Boulevard, Hayward, CA 94544
New Pre-Owned Service Directions
Saved 0
Viewed 0
Locations Locations 7 Hours Phones
Carnamic logo
  • New
    • View all [348]
    • Hyundai
      Hyundai [76]
        • Elantra
          Elantra [7]
        • Elantra Hybrid
          Elantra Hybrid [4]
        • Elantra N
          Elantra N [1]
        • IONIQ 5
          IONIQ 5 [23]
        • Kona
          Kona [3]
        • Kona Electric
          Kona Electric [6]
        • Palisade
          Palisade [1]
        • Santa Cruz
          Santa Cruz [1]
        • Santa Fe
          Santa Fe [5]
        • Santa Fe Hybrid
          Santa Fe Hybrid [6]
      • Santa Fe
        Santa Fe [5]
      • Santa Fe Hybrid
        Santa Fe Hybrid [6]
      • Sonata
        Sonata [3]
      • Sonata Hybrid
        Sonata Hybrid [6]
      • Tucson
        Tucson [7]
      • Tucson Hybrid
        Tucson Hybrid [1]
      • Venue
        Venue [2]
    • Infiniti
      Infiniti [23]
        • Q50
          Q50 [7]
        • Q60
          Q60 [1]
        • QX50
          QX50 [4]
        • QX55
          QX55 [2]
      • QX55
        QX55 [2]
      • QX60
        QX60 [9]
    • Kia
      Kia [26]
        • EV6
          EV6 [9]
        • Forte
          Forte [9]
        • Seltos
          Seltos [1]
        • Sorento Hybrid
          Sorento Hybrid [4]
      • Sorento Hybrid
        Sorento Hybrid [4]
      • Soul
        Soul [2]
      • Sportage Hybrid
        Sportage Hybrid [1]
    • Mitsubishi
      Mitsubishi [60]
        • Eclipse Cross
          Eclipse Cross [2]
        • Lancer Evolution
          Lancer Evolution [1]
        • Mirage
          Mirage [1]
        • Mirage G4
          Mirage G4 [3]
      • Mirage G4
        Mirage G4 [3]
      • Outlander
        Outlander [21]
      • Outlander PHEV
        Outlander PHEV [32]
    • Nissan
      Nissan [163]
        • Altima
          Altima [7]
        • Armada
          Armada [7]
        • Frontier
          Frontier [11]
        • Frontier Crew Cab
          Frontier Crew Cab [8]
        • Kicks
          Kicks [3]
        • Murano
          Murano [5]
        • Nissan ARIYA
          Nissan ARIYA [20]
        • Nissan LEAF
          Nissan LEAF [23]
        • Pathfinder
          Pathfinder [18]
        • Rogue
          Rogue [43]
      • Pathfinder
        Pathfinder [18]
      • Rogue
        Rogue [43]
      • Rogue Sport
        Rogue Sport [1]
      • Sentra
        Sentra [11]
      • Titan
        Titan [1]
      • Titan Crew Cab
        Titan Crew Cab [2]
      • Versa
        Versa [3]
    • Shopping Tools
        • Shop All Inventory
        • Value Your Trade
      • Value Your Trade
  • Pre-Owned
    • View all [192]
    • Cars [85]
    • Trucks [18]
    • SUVs & Crossovers [84]
    • Vans [5]
    • Hybrid & Electric [40]
    Price
    • Under $20,000
    • $20,000 - $25,000
    • Over $25,000
    Features
    • New Arrivals
    • Nearly new
    • Over 30 MPG
    • Moonroof
    • Leather seats
    • Heated seats
    Shopping Tools
    • Shop All Inventory
    • KBB Instant Cash Offer!
    • Why Buy Used?
    • Simple Exchange
    • Value Your Trade
  • Electric Vehicles
    • Electric Vehicles For Sale
    • FuelEconomy.Gov
    • Clean Air Vehicle Decals
  • Finance
    • Shop All Inventory
    • Apply For Finance
    • Vehicle Buyer’s Guide
    • Leasing vs Buying
    • Sell or Trade In Your Car
    • Value Your Trade
    • Vehicle Protection Products
    • Paint and Fabric Protection
    • Carnamic Connect
  • Service
    • Our Services
    • Transmission Services
    • Vehicle Alignment
    • Schedule Service
    • Don’t fix it. Sell it to us!
    • Order Parts
    • Service & Parts Specials
  • About Us
    • Research
      • New EVs
      • New Hybrid Vehicles
      • New Hyundai
      • New INFINITI
      • New Kia
      • New Mitsubishi
      • New Nissan
      • Used AWD Vehicles
      • Used Dodge
      • Used Ford
      • Used Fuel Efficient Vehicles
      • Used Honda
      • Used Hybrid and Electric Vehicles
      • Used Kia
      • Used Luxury Vehicles
      • Used Mitsubishi
      • Used Nissan
      • Used SUVs & Crossovers
      • Used Trucks & Vans
      • Used Vehicles Under $20,000
    • Our Dealership
    • Our Promise
    • COVID-19 Information
    • Our Blog
    • Simple Exchange
    • Carnamic Career Center
    • Contact Us
Schedule Service
Home / Apply for finance in Bay area, Ca / Leasing vs Buying

THE 2020 GUIDE TO LEASING VS BUYING

You’ve made the decision: it’s time to get a new car. Now you’ve got to decide on how to pay for it. You can either pay for the car in full, finance it or lease it. Let’s assume that you don’t have a pile of cash set aside for that first option. This narrows your choices down to two: leasing and financing.
But how do you decide which is the right choice for you? And what about all that financial lingo dealers throw around, what does it all mean?

Buying vs Leasing

FINANCING

The Basics

When you think of financing, just think of loans. By financing, you’re essentially spreading out the full asking price of the vehicle over a longer period of time. This is done by borrowing the money you need from a financial institution like a bank or credit union, commonly referred to as the lender. 


First, you apply for the loan for the vehicle, which an institution may or may not grant you based on your credit history. Once you get credit approval, you pay a down-payment toward the loan — usually at least 20% of the cost of the vehicle, - but you can put down whatever you can reasonably afford. The bigger the down-payment you make, the less you’ll need to pay per month. After you make your payment and sign all the appropriate paperwork the car is yours! You’ll just have to make monthly payments to the lender until you’ve paid back the full amount you borrowed.

PROS:

  • Full ownership of the vehicle
  • No mileage limits, excess depreciation, mileage fees
  • Build equity in the vehicle

CONS:

  • Locked into your choice of vehicle for longer
  • Higher monthly payment
  • Limited warranty coverage
How does financing work?

HOW DOES FINANCING WORK?

If you’re financing a vehicle, you’ll be applying for credit. The total amount you will pay per month depends on multiple factors including the price of the vehicle, the Annual Percentage Rate (APR) and the length of the loan terms (shorter loans typically have lower rates but higher monthly payments). Loan terms for vehicles are typically 36, 48, 60 or 72 months.

As you make monthly payments the loan amount will drop to zero and you will own the vehicle completely. 

TERMINOLOGY:

DTI - DEBT TO INCOME

DTI determines your available income. It includes all outstanding debts including rent/mortgage, monthly utility bills, credit card debt and other loans you may have. DTI should be under 50%.

PTI - PAYMENT TO INCOME

PTI is the amount of the monthly vehicle payment compared to your monthly gross income. A reasonable PTI is around 15%.

LTV - LOAN TO VALUE

LTV is the amount financed compared to the vehicle’s worth. If you finance a car for $19,000 and the vehicle’s value is $20,000 you would have a 95% loan to value.

What if I have bad credit?

WHAT IF I HAVE BAD CREDIT?

Don’t get discouraged! With so many factors going into financing a new vehicle you can still get an auto loan even with bad credit. Before you visit the dealership determine your financial situation and budget. Get a copy of your credit report so you know what to expect in terms of financing. Find a vehicle that fits in your budget and go to a reputable dealer.

SOME THINGS TO THINK ABOUT

Make a wise vehicle selection. Aim for the newest, lowest mileage vehicle within your means.

Put money down to decrease the size of the loan.

Having a strong cosigner can help you qualify for the loan.

Keep the loan with good payment history for at least 12 months.

Don't shop your credit.

Apply for credit at GoodAutoLoan.com

Good Auto Loan

LEASING

If you like the sound of driving something new every few years and saving money when making a down-payment, leasing may be right for you.

When you lease a vehicle, there are no loans involved. You establish lease terms based on how many months or miles you want to drive that vehicle (for example: 36 months or 36,000 miles at 12,000 miles per year). You make a down-payment and pay a monthly fee, just as you would if you were financing. However, the down-payment you make is usually, generally lower when you lease, and your factory warranty may cover the cost of typical repair issues that arise when you’re buying to own.

When your lease term is up, you must give the car back to the dealership and pay any excess depreciation or mileage fees (if any). The car also must look as close to it did when you got it as possible, so accessories you added have to be removed and permanent alteration or customization isn’t allowed. You may have the choice of buying the car at its residual value, but most people typically lease a different vehicle under a fresh term or buy a new or used vehicle.

PROS

  • Lower down payment
  • No loans
  • Factory warranty coverage
  • Ability to upgrade to a new car sooner
  • Exchanging vehicles more often gives you a varied driving experience

CONS

  • Mileage and term limits
  • Express depreciation and mileage fees
  • Limited customization
  • No equity in the vehicle
  • No ownership of the vehicle
WHAT ARE YOU GOING TO DO WITH THE VEHICLE?

WHAT ARE YOU GOING TO DO WITH THE VEHICLE?

It’s also good to keep in mind what you want to do with your vehicle. If you’re planning on hauling boats and trailers around on the weekends or consistently heading off the beaten path, it may be unwise to lease your vehicle. If you damage or scuff up a leased vehicle through regular use, you’ll need to either get it fixed before you turn it in or pay excess depreciation fees when you return it to the dealership, all for a car you don’t own.

And if you plan to put in some serious mileage in your vehicle through long-distance business travel or frequent road trips, you could easily blow past your lease’s pre-established mileage limit. Then, at the end of the lease, you’ll have to pay for every mile you’ve driven beyond that limit, which at an estimated 10 to 25 cents per mile can add up quickly! 

WHERE DO YOU SEE YOURSELF IN FIVE YEARS?

WHERE DO YOU SEE YOURSELF IN FIVE YEARS?

If you’re living in a more suburban or rural town right now but expect to be moving to a crowded city in the next few years, you may decide that taking out a loan is not the right move financially. You’ll be locked into a longer-term payment plan, which may become a small burden. For example, you’ll have to regularly pay things like garage, permit and car insurance fees if you bring your vehicle into the city, all when it may be easier and more affordable overall to just use public transit. If you lease, you can drive the car that you need for the next 36 or 48 months and then cleanly return it before you move into the city.

On the other hand, if you see your living situation changing as you move away from the city or out of state, it may be wiser to finance. You won’t need to come back to return your car to the dealership you leased it from, and you’ll have a vehicle to drive for as many years as you need it. You can even sell your vehicle for some extra income, or give it to your children when they get their drivers’ licenses 

Metro area

We hope you found this information helpful. Our non-commissioned, certified specialists are available to provide additional information if you need it. Also, if you’re wondering what makes San Leandro Kia Different, please visit Our Promise to find out.

Our Promise New Vehicles Used Vehicles

Locations

REDWOOD CITY INFINITI

543 El Camino Real
Redwood City, CA 94063
(650) 241-2525

HAYWARD MITSUBISHI

25601 Mission Blvd
Hayward, CA 94544
(510) 999-5999

REDWOOD CITY NISSAN

543 El Camino Real
Redwood City, CA 94063
(650) 241-2525

SAN LEANDRO HYUNDAI

1066 Marina Blvd
San Leandro CA 94577
(510) 347-3000

SAN LEANDRO NISSAN

1152 Marina Blvd
San Leandro, CA 94577
(510) 347-3030

SAN LEANDRO KIA

1066 Marina Blvd 
San Leandro CA 94577
(510) 347-3000

SAN JOSE MITSUBISHI

3396 Stevens Creek Blvd
San Jose, CA 95117
(408) 300-9000

Next-Generation Engine 6 Custom Dealer Website powered by DealerFire.  Part of the DealerSocket portfolio of advanced automotive technology products.
Copyright © Carnamic      Privacy  |  Sitemap