Sometimes it can be better to finance a car rather than lease it! Some of the reasons this may be true include:
Federal EV credit - some lease originators may not pass the full Federal EV credit or state credits. Through financing or balloon loans (another type of financing, you can take advantage of these credits if you have the tax liability)
High Lease Money Factor - some lease originators have a very high money factor, higher than what it would cost to lend from another bank! Combined with other factors this may be an incentive to finance
The car will hold its value - Sometimes when you are looking at a new car, it will greatly hold its value in comparison to what you paid! Some examples can be Audi RS cars, certain Mercedes AMGs, and so forth! This may not hold true for all vehicles, but some may be worth holding long-term.
Key Points on Finding the Best Place to Finance:
Look at different sources of financing! Credit Unions and Community Banks can often offer lower interest rates, especially if you switch to a direct deposit with them.
Lending institutions can often offer lower interest rates for alternative energy vehicles (Electric, Hybrids, Hydrogen, etc)
Extend your search, in the age of the internet you don’t need to end your search within 50 miles, shop nationwide, you can join a credit union or bank remotely!
BETA GOOGLE SHEET
This is a beta auto scraping spreadsheet I made while sick with COVID that pulls from a variety of credit unions nationwide. The rates autoupdate, and all necessary requirments are stated or linked. Please PM or link new rates or Banks/Credit Unions so I can add them to the scraper. It will pull that latest rates whenever you open the sheet.
They give .5% for payroll deduction I’ll include it, but that’s something that some people don’t want to have the hassle of dealing with for a .5% discount.
It’s a payroll deduction or automatic payment from an outside account.
Automatic payment is the better option. I think most of us would suggest autopay anyway.
If anyone has firsthand experience with any of these, that might also be helpful.
In April I closed a 65-month loan for a lease buyout with DCU at 1.49% (rate no longer available).
The APR was the only reason I put up with DCU’s neglect and abuse, which I expected going in. Credit unions as a group are the paragon of incompetence and lethargy.
Hold times on inbound calls at DCU were in the 2- to 4.5-hour range. Secure messages conveying specific information, making specific requests like the exact loan amount needed, and other focused communications got ridiculous responses thanking me for my business and inviting me to call the loan department between the hours of blahblahblahblah" for assistance.
They lost the pages of the BMWFS payoff package that I had to sign, and called me to ask me to resubmit them while I was in line at the airport waiting to be rebooked after a canceled flight.
The guy was very nice and said he’d call me back in 30 minutes. I never heard from anyone again, and the loan closed anyway. Maybe they found the docs. Maybe they didn’t. But I’m done.
I used myautoloan.com for my wife’s Volvo. They provide offers from 4 banks. We ended up with Veridian CU. We actually took a higher rate in exchange for no payment for 90 days since we’re just going to cash in on the equity. I believe the initial offer was sub 2%.
