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Kia Lease vs Financing: Which Is Better? Find Out
Leasing and financing a new Kia is a critical decision. While both options have many perks, it all comes down your preferences and priorities. For instance, leasing a new Kia is typically ideal for drivers that drive less than 12,000 miles annually and are looking to elevate their standards without compromising the things that they love most and financing a new Kia vehicle is perfect for drivers seeking more equity. Keep reading to learn more about our new Kia lease and financing options.
What Is Kia Financing?
Kia financing is a contractual agreement that allows drivers to take out a loan to pay toward the purchase of a car. Drivers are expect to pay off the auto loan in a set period of time. Auto loan payments are typically made toward the principal of a vehicle.
What Is A Kia Lease?
A new Kia lease is a contractual agreement that requires drivers to pay toward the use of the vehicle rather the ownership. The terms of a new Kia lease typically includes a set duration of 12-48 months, fix mileage terms, and a manufacturer warranty. At the end of a new Kia lease drivers have the option walk away, upgrade, or buyout their current lease.
Ways To Finance A New Kia?
- Dealership Financing
- Bank
- Credit Union
- Personal Loan
Ways To Lease A New Kia?
- Dealership Leasing
- Manufacturer Leasing
- Third-Party Leasing
Buy Or Lease A New Kia: Pros & Cons
When deciding between financing or leasing a new Kia there are 10 key factors:
- Vehicle Selection - Typically, new Kia lease deals, specials, and offers make it easier to purchase the latest most current models. Financing a new Kia on the other hand, gives drivers access to a wider range of Kia vehicle models, years, and trim levels.
- Ownership - Financing a new Kia is ideal for drives seeking another ownership without a monthly payment in the future. Leasing is ideal for drivers who prefer less commitment are looking to buy, trade, or walk away from their vehicle at the end of their terms.
- Down Payment: New Kia lease terms typically require less money up-front than financing a new Kia .
- Monthly Payment: New Kia leases typically have lower monthly payments than financing.
- Mileage: Kia leases are typically ideal for drivers that drive less than 10,000 or 12,000 miles annually. For drivers that spend more time on the road, financing a new Kia is a better choice.
- End of Term - Kia Leasing is ideal for drivers who prefer a smooth transition out of their vehicle at the end of their lease term. Kia Financing, on the other hand is ideal for drivers seeking equity.
- Vehicle Customization: Financing a new Kia is ideal for drivers looking to customize their vehicle. Kia lease drivers are typically required to return their Kia vehicle in stock condition.
- Trade-in Options: Trading in a Kia lease it typically easier than trading a preowned financed Kia.
- Warranty: Kia lease terms typically end before the vehicle warranty experience. Kia finance vehicle warranties typically expire before the end of term. Luckily, all Kia Vehicles come standard with Kia's 100,000 mile warranty
| Buying | Leasing | |
| Ownership | Financing or purchasing a car with cash enables a driver to secure vehicle ownership and build equity. | The car lessee does not own the vehicle when the car lease expires. The car lessee does not have equity in the car to use towards the purchase of another vehicle. Vehicle leasing or car leasing is the leasing of a motor vehicle for a fixed period at an agreed amount of money for the lease. |
| Down Payment | New car financing requires a down payment. The down payment is the money you towards the purchase price of a car. It reduces the size of your loan. The down payment also impacts your auto financing rate. | New car lease agreements provide qualified lessee's with the option to pay zero down. In a car lease, a down payment is often called a capitalized cost reduction, or cap cost reduction. A car lease down payment does reduce your payments in the future. |
| Monthly Payment | Auto loan payments are higher than car lease payments. Auto loan payments require borrowers to pay the full purchase price of the vehicle plus interest, taxes, and fees. | Monthly car lease payments are typically lower than car loan payments. Car lease agreements only require car lessee's to pay for the vehicle depreciation during the lease term. |
| End of Term | At the end of the car loan term drivers can keep their vehicle and use it as equity towards their next vehicle. At the end of the loan term drivers are relieved of making car payments. | At the end of the lease term, drivers must return their vehicle in pristine condition. Drivers have the option of leasing another vehicle or financing their recent vehicle. |
| Future Value | Auto loan borrowers lose vehicle equity whenever they purchase or finance a new vehicle. | New car lessee's are only responsible for paying the depreciation value of the vehicle and additional fees. New car lessee's do not have to worry about losing equity in a car lease. |
| Mileage | Car buyers do not have a mileage limit. | New car lessee's are limited to mileage terms agreed upon in their car lease agreement. Driver will incur an additional fee if they surpass their mileage limit. |
| Customizing | Car buyers can customize their vehicle. | New car lessee's can not customize their vehicle. If vehicle is not returned in pristine condition the car lessee will incur an additional fee. |
| Trade-in | Car buyers must find a used car buyer or used car trade-in dealer to get rid of their old used car. | New car lessee's do no have to worry about selling their used car. Car lessee's have the option of trading their old used car lease for a new car lease. |
| Warranty | Car buyers are only protected by the Kia warranty for a limited amount of time. | New car lessees can drive with confidence, knowing that the Kia warranty protects them. Most car leases end before the warranty expires |
Kia Lease vs Finance FAQ
Kia Lease vs Financing: How Do I Know Which Option Is Best for Me?
One of the best ways to determine whether you should lease or finance a new Kia vehicle is to review your annual mileage. Most Kia lease agreements include mileage limits between 10,000 and 12,000 miles per year. If you typically drive more than 12,000 miles annually, financing may be the better option.
Leasing is often a great choice if you want lower monthly payments or prefer little to no money down. On the other hand, if you plan to customize your vehicle or keep it long-term, financing a new Kia may be the better solution.
Kia Lease vs Financing: If I Have Bad Credit Should I Finance or Lease a New Kia?
Leasing is typically best suited for drivers with fair credit or higher. If you attempt to lease a new vehicle with a lower credit score, you may be required to pay a larger down payment or higher monthly payments.
If you have poor credit, financing a new Kia may be a better option. Many dealerships offer a variety of subprime auto loan programs designed to help drivers with less-than-perfect credit get approved for a vehicle.
Can I Trade in My Old Kia for a New Car Lease?
Yes, absolutely. You can trade in your current vehicle toward a new Kia lease to help reduce your monthly payment or the amount due at signing.
Before finalizing the lease, the dealership will need to complete a vehicle appraisal. This can typically be done either online or in person at the dealership.
Can I Trade in My Current Vehicle if It's Not Fully Paid Off and Upgrade to a New Kia Lease?
Yes. It is possible to trade in a vehicle that still has an outstanding loan balance and upgrade to a new Kia lease or finance vehicle. The process typically works as follows:
- Get a vehicle appraisal online or at the dealership.
- The dealership will present an offer for your vehicle.
- Any remaining loan or lease balance may be added to the balance of your new vehicle.
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