Posts Tagged ‘auto leasing’
Buying or Leasing?
This is one classic scenario that haunts ever car consumer out there: Pay cash upfront or settle for monthly payments? Will you be buying or leasing 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
First, check your finances. It is important that you are able to afford the vehicle. Ask yourself, how stable your job is and how healthy you are financially. The short term monthly cost of leasing is definitely lower than making monthly payments on buying: you essentially pay only the portion of the car that you use up upon the time that you actually drive it.
If you have a lot of cash up front, 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.
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
If you want to drive a car for more than five 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, take into consideration your transportation needs: How many miles do you drive per year? How well do you drive and maintain your vehicles? If your answer becomes: “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,” you are better off buying a vehicle.
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 incurhefty end-of-lease costs.
Financing A New Car
Getting a new car always involves calls. Pay cash or finance? Buy or lease your new car?
There’s no wrong or right answer. Cash upfront, financing, and leasing all have advantages and downsides. As is the case with every other common quandary, there is no slam-dunk answer. Ultimately it comes down to private preference and a group of basic fiscal concerns.
First, affordability is obviously key. How how stable is your job? How good are your finances? If cash flow is a concern then leasing with its short term standard payments is a great option. With a lease, monthly costs are seriously lower than payments when buying. After all , with a lease you only pay for a fragment of the car’s cost — the part used up during the time you drive it.
purchasing an auto with cash is a choice of course. Or you could decide to make a huge downpayment and still lease of finance. You could choose to pay the down the payment or sales taxes and fees. Otherwise all of these extras are rolled into the loan.
With any type of financing the interest rate is set by the bank and lendor. It pays to window shop for a good rate. Infrequently the dealer has special financing but many times your local bank is the best chance.
Suppose you would like to get into luxury models but can’t afford the upfront money to buy the car. If you’ve a good job and credit you’re potentially a good candidate for leasing. Unlike buying, leasing gives you the option of not needing to fork out the down-payment up front. And the interest rate will be like what you would pay if you bought the car but you will only be financing a fraction ofthe total car costs.
Leasing does have its risks though. Terminating a lease early or defaulting on your monthly lease payments includes stiff fiscal penalties. Your credit could be ruined. As with any loan or financing, you need to make sure you carve out the monthly lease payment in your financial position for the obvious future, at least for the period of the lease.
Besides the financial aspect, making a buy or lease decision depends on your own particular life-style decisions and preferences. Think about what the auto means to you : are you the type of person to bond with the vehicle or would you rather have the fun of something new? If you’d like to drive a car for at least 5s years, negotiate carefully and buy the auto you like. If, on the other hand, you don’t like the idea of ownership and prefer to drive a new auto every 2 to 3 years then you must lease. Next, factor your transportation wishes : How many miles do you drive a year? How properly do you maintain your cars? If you answer is : “I drive forty thousand miles a year and I don’t really care much about my cars as I don’t mind working with fix bills”, then you are likely better off buying. Leasing relies on the presumption of limited-mileage, generally less than 12,000 to fifteen thousand miles a year, and wear-and-tear considerations. Unless you can keep in the prescribed mileage boundaries and keep the car in a good condition at the end of your lease, you could suffer wide end-of-lease costs.
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