Our finance center specialists: Skilled in the art of simplified financing

At Volvo Cars Chico in Chico, CA, we understand that figuring out how to pay for your brand-new Volvo - or a quality pre-owned car - can seem a bit confusing. It might even seem a bit intimidating. That's why you'll be glad to know the friendly, knowledgeable specialists in our finance center are adept at taking the mystery out of financing your next car. We can help you decide between a loan and a lease, then help you get the right terms.

What's the basic idea behind a car loan?

A car loan is the classic way to pay for a new or pre-owned vehicle. After all, few of us have several thousand dollars just sitting in the bank, all ready to cover the cost of something as substantial as a new or used car. With a car loan, a lender evaluates how credit-worthy you are based on your credit history. If you qualify, the lender will loan you enough money to buy a car and you then re-pay the loan over a period of years.

How much will the lender charge me in interest for a car loan?

That's a great question and it depends on several things, including the current interest rate environment and how good your credit score is. If, for example, interest rates are lower, you can get a better rate. If your credit score is higher, you can qualify for a lower interest rate - which can save you quite a bit over the course of re-paying your loan. "Interest" is how the lender makes money: By charging you a fee for the privilege of borrowing.

What are some advantages of getting a car loan?

A car loan is not only the most common way to acquire a car but we believe it's also the best financial strategy for most people. The reason is because, with a loan, you're creating a share of ownership in the car you're buying. If you make all your car loan payments, you'll own the car. That's not true of a lease. As you make payments, you're gradually building cash value with your name on it. You can use that cash value to help pay for your next car.

How does a car lease work?

Leasing a car is like renting it for a specific period of time. With a lease, you are not actually buying the car and you won't ever own it. Instead, you're paying money to the leasing company (usually the financing unit of a car maker like Volvo) for the privilege of driving that car. You keep making payments for the entire period of the leasing contract, which is usually 36 months. At lease-end, you return the car to our dealership.

What are some advantages of leasing?

The biggest reason people lease a car is because the lease payments you make every month are nearly always lower than what you'd pay with a car loan. At the end of your lease, you don't have to worry about selling that car because you don't own it: The leasing company does. So you can just drop off that car at our dealership, pay for any charges like excess wear-and-tear expenses, and we'll take care of selling it.

Our finance experts can tell you more about loans vs. leasing

There's a lot more to the story when it comes to deciding between a loan and a lease, so we can explain the pros and cons of each option. Once you decide, we'll tap our financing network to help you get the best available loan or lease terms. Contact the specialists in our finance center by phone or in person to get the automotive financial guidance you need at Volvo Cars Chico in Chico, CA.

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