Financing a vehicle purchase



How best to make a big purchase when the whole world seems more expensive.


Aside from a home, a car is one of the biggest financial decisions you will likely make. Knowing the basics of how best to make the purchase can decrease the confusion — and have you driving off in your vehicle of choice. We turned to Rashelle Robinson, director of finance & insurance at Capitol Auto Group, for advice.


What is the most common way people pay for car purchases nowadays?

Between 73 – 83% of transactions are financed, and leasing typically runs around 20% of our non-cash deals.


Some say leasing a car is a bad deal, while other people swear by it. What gives?

The old style of leasing was an “open-end lease,” which was popular back in the 80s. It meant the value of the vehicle could change, and at the end of the lease you could owe a lot more money. Today, leases are “closed-end leases,” which means the end value of the vehicle is guaranteed as long as the mileage is within the limits of the lease.


If someone trades in their vehicle every three to four years, they should lease. Most financial advisors will also tell you to lease property that depreciates. People who don’t like leasing usually say they want to “own” the vehicle, but whether you finance or lease, you don’t fully own the car until you pay it off.


Do I get a loan with my bank or do I go through the dealership?

At the dealership we have access to over 50 banks and credit unions. We also have a massive portfolio that allows us to secure financing for a wide range of consumers. We can acquire the same or sometimes better terms that the banks offer directly, so the customer can do everything in one stop.


Can I put it on a credit card so I can earn cashback and other rewards?

It differs from dealer to dealer, but at Capitol we have limits on credit card transactions, and we review them on a case-by-case basis. There is also a 2% service fee on any credit card transaction.


If I have cash saved up, is it better to use my savings or to finance the purchase?

Depending on what type of account your money is in, it’s sometimes better to finance or lease because you’re earning more interest than what you’re paying in interest on the loan. Again that completely depends on the type of account those funds are in, and if they are generating more interest than the rate on the lease or loan.


 

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Meet Rashelle Robinson

Rashelle Robinson is the the director of finance & insurance for Capitol Auto Group. She has been married for 20 years, with three grown children and a granddaughter. Her son also works part time at Capitol Auto. She and her family enjoy traveling, and their favorite vacation spots are Hawaii and Whistler, British Columbia.