Buy or lease a fresh car? May
Buy or lease a fresh car?
One of the thickest drawbacks — especially if you are not acquainted to leasing — is that you are coerced to make a major financial decision when your lease expires. You must either come back the car and buy or lease a fresh one, or buy the vehicle at the lease-end price. (Typically, the value of your car or truck at the end of the lease is set in advance.)
Leasing a car rather than buying it will generally cost you much more than simply financing a purchase from the commence. If you think you might want to buy the car, do that from the outset. Lease only if you’re sure you don’t want to keep the car long term.
If you buy a car or truck, you can postpone any decision about substituting it at least until mechanical trouble coerces your forearm. If you don’t mind driving an older car, the best decision on purely economic grounds usually is to buy a fresh car and keep on driving it long after your loan payments have stopped.
If you typically trade for a fresh car every four years or less, you’ll want to avoid the loan down payment of 10% to 20%, drive close to but not more than the 15,000 miles a year permitted in most leases and typically keep your vehicle in good condition to avoid end-of-lease penalties, you might well be glad leasing.
Keep in mind that there is a reason why those low lease payments look so attractive: Instead of paying for the entire car, you’re only paying the estimated depreciation over the time you are leasing it. So to get a truly good lease deal, you need to look further than just the payments. You need to understand how leasing works, do your homework, and negotiate as hard as if you were buying the car.
Here is a step-by-step guide:
Master the jargon. You can’t successfully negotiate a lease without becoming fluent in the industry’s terms. What you need to know before you begin to bargain: The capitalized cost is the equivalent of the selling price, which you want to get down as low as possible. The residual value is the estimated worth of the car at the end of your lease. Your monthly payments are determined by the difference inbetween these two figures, plus an interest charge known as the money factor. Thus, raising the residual value or lowering either the capitalized cost or the money factor will lower your payments.
Look for a manufacturer-subsidized lease. These deals, often promoted in splashy ads in newspaper auto sections, are likely to be the cheapest available.
Buy or lease a fresh car? May
Buy or lease a fresh car?
One of the largest drawbacks — especially if you are not familiar to leasing — is that you are compelled to make a major financial decision when your lease expires. You must either comeback the car and buy or lease a fresh one, or buy the vehicle at the lease-end price. (Typically, the value of your car or truck at the end of the lease is set in advance.)
Leasing a car rather than buying it will generally cost you much more than simply financing a purchase from the begin. If you think you might want to buy the car, do that from the outset. Lease only if you’re sure you don’t want to keep the car long term.
If you buy a car or truck, you can postpone any decision about substituting it at least until mechanical trouble coerces your arm. If you don’t mind driving an older car, the best decision on purely economic grounds usually is to buy a fresh car and keep on driving it long after your loan payments have stopped.
If you typically trade for a fresh car every four years or less, you’ll want to avoid the loan down payment of 10% to 20%, drive close to but not more than the 15,000 miles a year permitted in most leases and typically keep your vehicle in good condition to avoid end-of-lease penalties, you might well be blessed leasing.
Keep in mind that there is a reason why those low lease payments look so attractive: Instead of paying for the entire car, you’re only paying the estimated depreciation over the time you are leasing it. So to get a truly good lease deal, you need to look further than just the payments. You need to understand how leasing works, do your homework, and negotiate as hard as if you were buying the car.
Here is a step-by-step guide:
Master the jargon. You can’t successfully negotiate a lease without becoming fluent in the industry’s terms. What you need to know before you commence to bargain: The capitalized cost is the equivalent of the selling price, which you want to get down as low as possible. The residual value is the estimated worth of the car at the end of your lease. Your monthly payments are determined by the difference inbetween these two figures, plus an interest charge known as the money factor. Thus, raising the residual value or lowering either the capitalized cost or the money factor will lower your payments.
Look for a manufacturer-subsidized lease. These deals, often promoted in splashy ads in newspaper auto sections, are likely to be the cheapest available.