It’s the classic dilemma that faces every auto-consumer out there: Pay cash upfront or forego the ownership and pay monthly settlements instead?
on a set of financial and personal considerations.
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.
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
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, 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 stick to the given mileage and keep the car well maintained at the end of your lease contract, you might just get hefty fines at the end of your lease agreement.
Article by: [Mike B.] , find out more about [Here] .