When it comes to getting into a new Kia, it’s easy to focus on the excitement of a new ride. But having a solid car financing plan will make your time with your Kia that much more enjoyable, knowing that you’ve done everything possible to make it as affordable as it is enjoyable. Let a Kia dealer walk you through how financing works so you can make the best decisions about your next ride.
Navigating Car Financing: A Kia Dealer’s Guide
New or Used?
A Question of Depreciation
As soon as it drives off a dealer’s lot for the first time, the sad truth is that a vehicle’s value already begins to diminish, a process known as depreciation. That means that a 3- or 4-year-old Kia may be worth as little as half as much as its sticker price, even if it’s never been driven. Because a vehicle can depreciate as much as 50% or more in its first few years of life, it’s important to decide whether buying a vehicle brand-new is worth the extra investment.
The upside is that if you choose to buy a used vehicle, you can often get a car that’s in great shape and is far more affordable than its brand-new cousin, offering the ability to get a higher trim level or a more expensive model than you could afford if you were to buy new.
Used Vehicles Have Fewer Options
Unfortunately, you may be much more limited in what’s available. Your Kia dealer may not have your preferred model or trim level on the lot, for example. Moreover, leases are almost never available on used vehicles, meaning that buying the car outright will likely be your only option when shopping used.
Buy or Lease?
Deciding whether to buy or lease your Kia can be a bit tricky. When you buy a vehicle, it becomes yours, an asset that you can sell or trade at whim, but also something you’re responsible for maintaining. Leasing, on the other hand, means never building equity in a vehicle but can often be more affordable in the short term, since monthly payments are usually lower. Here are a few factors that may help you make a good decision on whether to buy or lease:
Buying: Your Best Bet for the Long Term
If your vision for your next Kia is to drive it for years and tens or hundreds of thousands of miles to come, buying becomes your best bet. While monthly payments may be higher, each loan payment builds equity in the vehicle, and when the car is paid off, you continue to own it. There are no limits on how many miles you can drive, and you’re the one who decides what wear and tear is acceptable.
Ownership isn’t always for everyone, though. Maintenance costs are the responsibility of the owner when you buy your car, not the dealership. Oil changes and brake jobs are your responsibility, which is an added cost. And since depreciation happens quickly, you may be “upside-down” on your car loan for a time, where you owe more on the loan than the vehicle is worth.
Leasing: Lower Payments, Higher Trims
Choosing to lease a vehicle can be a great option for those who crave novelty. Since you surrender the vehicle at the end of the lease term, you can lease a new vehicle every few years. Maintenance is usually covered by the dealer, and monthly payments are usually more affordable than when buying. That can also mean that vehicles or trims that would be out of your budget to buy, may be affordable to lease.
Of course, leasing has its downsides, too. Most leases have mileage limits, and exceeding them can result in paying for each mile you drive over the limit. In addition, if you put additional wear and tear on the vehicle, you can be charged fees to restore the vehicle by the dealer at the end of the lease. Leasing also never builds equity in the vehicle; ultimately, like renting an apartment, someone else owns the car the entire time.
Making Your Monthly Payments Meet Your Budget
Whether you choose to buy or lease, many elements play into determining your monthly payments. Generally, well-qualified candidates with excellent credit will get the best deals, but the good news is that there are options available even if your credit isn’t stellar. While most dealers have a payment calculator on their site, here’s a guide to making sure your monthly payment fits into your budget.
Choosing an Affordable Kia
The good news is that Kias are, on the whole, a very affordable brand compared to the competition. Whether you’re buying or leasing, though, the total sticker price (plus taxes and fees, and minus rebates, cash allowances, etc.) is one of the biggest determining factors in making sure your monthly payments meet your budget. Factoring your budget into your buying decision and car financing plan is a smart move.
Balancing Up-Front Costs vs. Long-Term Affordability
Once you’ve chosen your vehicle, the next decision is how much you want to pay up-front for your loan or lease. The more you pay out-of-pocket up front, the less has to be financed and the lower your monthly payments and total investment will be. But if you choose to prioritize maintaining as much cash on hand as possible, know that you’ll pay more across the life of the lease or loan.
Don’t Forget PHEV Incentives
Whether you choose to buy or lease, there are significant advantages to buying or leasing new EV or PHEVs, with up to $7,500 tax incentives available on qualifying vehicles, such as the EV6 or EV9. Make sure you factor those savings into your purchasing decisions if you’re considering buying electric!
Whether your heart is set on a new Kia or a used one, on buying your ride or leasing, your Kia dealer will have plenty of car financing options to help you get into a new (or new-to-you) car that meets your budget. So schedule a test drive at Auffenberg Kia of Cape Girardeau in Cape Girardeau, MO, and let our team help you find the perfect Kia for you.
