Posted By Admin On August 28, 2015
In the analysis of deciding what kind or car to get, and whether to buy a car or lease one instead, the issue of credit scores loom large. Unless, of course, you’ve got the type of cash to pay for the car outright. But let’s assume this doesn’t apply, and that somebody else’s money will be needed to put you behind the wheel. Keep in mind, it is important to know what you want before you begin your car shopping experience, or at least have somewhat of an idea.
Your credit score number is going to be affected, in some way, by the decision that you make about getting a car. If you buy a car, its value is considered an asset that can be used to increase your net worth. However, if you leasing a car that bump up in your net worth won’t happen, because it’s not actually your car. Its like renting a car for several years at a great rate, just like it is renting an apartment.
Lease or loan payment obligations, on the other hand, will tend to drive your credit score downward. The more you borrow, the more interest you pay and the more downward pressure is exerted upon your credit score. But making the payments on time every month can help to boost your credit score, over the long term. As with every other financial obligation, paying your bills as they come due is the only real course of action to take.
But what about the numbers before the agreement is made? Surely there’s some way to see what other people are doing. And it turns out there is. Make sure you connect with a personal car shopper at MrCarShopper.com
According to data from Experian Automotive for the fourth quarter of 2014, the average credit scores for those buying and leasing a car were gathered, and they reveal an interesting trend. In short, those who bought a car had higher credit scores than those who leased the same make and model. This should not be surprising, since the purchase of a car requires more of a financial outlay than leasing that same make and model would.
Take, for instance, the Honda Accord. Experian found that the average credit score for those who bought an Accord was 728, while the average score for those leasing an Accord stood at 715. The same is true for the Jeep Grand Cherokee (an average of 735 for buyers and 728 for leasers), the Ford Escape (736 for buyers and 721 for leasers, and most of the other models popular with car buyers and leasers. The exception to this rule was the Nissan Altima, with a 702 average for buyers and a 712 average for those who leased one, instead?
What does this mean? It’s simple: the higher your score, the better your chances of qualifying for some assistance. And isn’t that true of all consumer goods? Make sure you understand the benefits of leasing a car instead of buying.