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Choosing the right path for purchasing a vehicle

Posted on Friday, February 15, 2013 at 1:34:06 PM

As buying an automobile is likely one of the largest financial transactions consumers make, it is generally a good idea they take their time to explore the many options available.

Making a brash decision on an expensive vehicle that does not properly suit your lifestyle, budget or needs can end up costing more money in the long run. Making a wish list of desired features and attributes will help you focus your attention onto a few makes and models.

After finding the right car for you, it would be wise to obtain auto financing from Home Loan Investment Bank to help with the cost. However, the decision making process doesn't end there, as many dealerships offer leasing plans - as opposed to purchasing.

"For consumers who want a newer vehicle at an affordable payment and drive a limited amount of miles on an annual basis, you can also purchase an extended mileage package, but then that adds to the monthly [leasing] cost," said Christine Dikdan, auto lending representative at HLIB. "The reverse of that is not purchasing the extending mileage, going over the set mileage and owing additional monies at the end of the lease. Depending on the amount this could 'force' a buyout, meaning you do not have the money to pay, and choose to buy the vehicle out at the assigned buy out price. This continues your time and payment of that vehicle, which can negate the main reason people choose a lease - to 'rent' a newer car with a low payment and replace with a different lease vehicle every two to four years."

While many Americans choose to lease vehicles, others enjoy the added degree of control buying a car affords.

"You control the purchase and either agree to the price or not," Dikdan said. "If the vehicle is financed, it is yours to trade, sell, or keep at the end of the term. If the vehicle is financed and monthly payment is a concern this may guide you into a lesser purchase than what you actually want. Buying a vehicle is a no restriction, except the restrictions you make and decide yourself, option."