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Additional
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Lease Financing
By Eric Larson
For auto-consumers, crunching the numbers is one of the most difficult and confusing aspects of leasing. Take the finance charge on a lease for instance. Most people just don’t understand how this Read more...
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Buy Or Lease?
By Eric Larson
It’s the classic dilemma that faces every auto-consumer out there: Pay cash upfront or forego the ownership and pay monthly settlements instead? Buy or lease for a new set of wheels?
As is the case with every other common dilemma, there is no slam-dunk answer. Each option has its own benefits and drawbacks, and it all depends on a set of financial and personal considerations.
First, your finances. Affordability is clearly key, and you need
to ask the question of how stable is your job and how healthy
is your general financial situation. The short-term monthly-cost
of leasing is significantly lower than the monthly payments when
buying: you only pay for “the portion” of the vehicle’s cost
that you use up during the time you drive it.
If you have a lot of cash upfront, then you can opt to pay the
down payment, sales taxes - in cash or rolled into a loan - and
the interest rate determined by your loan company. Buying effectively
gives you ownership of the car and that feeling of “free driving”
that goes on providing transportation. If, say, you want to get
into luxury models but can’t afford the upfront cash of purchasing
the vehicle than you’re a good candidate for leasing.
Unlike buying, it gives you the option of not having to fork
out the down payment upfront, leaving you to pay a lower money
factor that is generally similar to the interest rate on a financing
loan. However, these
benefits have a price: terminating a lease early or defaulting
on your monthly lease payments will result in stiff financial
penalties and can ruin your credit. You need to make sure you
carve out the monthly lease payment in your budget for the foreseeable
future, at least for the duration of the lease.
Besides the financial aspect, making a buy or lease decision
depends on your own particular lifestyle choices and preferences.
Think about what the car means to you: are you the sort of person
to bond with the car or would you rather have the excitement of
something new? If you want to drive a car for more than fives
years, negotiate carefully and buy the car you like. If, on the
other hand, you don’t like the idea of ownership and prefer to
drive a new car every two to three years then you should lease.
Next, factor your transportation needs:
How many miles do you drive a year? How properly do you maintain
your cars? If you answer is: “I drive 40,000 miles a year and
I don’t really care much about my cars as I don’t mind dealing
with repair bills”, then you’re probably better off buying.
Leasing is based on the assumption of limited-mileage, usually
no more than 12,000 to 15,000 miles a year, and wear-and-tear
considerations. Unless you can keep within the prescribed mileage
limits and keep the car in a good condition at the end of your
lease, you might incur hefty end-of-lease costs.
Additional
Resources
Fees Involved In Leasing
By Eric Larson
Mention auto-leasing and most people will automatically assume a low- monthly payment. There is actually more than what meets the eye, and a number of fees are involved at various stages of the Read more...
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Additional
Resources
How To Choose A Travel Agent You Won’t Regret
By Gregg
Airlines have had to be more and more competitive today with the increasing numbers of travelers heading to the internet to surf for the best deals in travel. In addition, airlines, hotels and rental Read more...
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