An Automobile Lease Might Be The Best Choice For You But Beware
An automobile lease is confusing to most people. It is not generally understood: the paperwork is complex and leasing terms are difficult. If you don't know anything about leasing, don't do it until you have read all of the tips in this leasing guide.
Buying a car and leasing one had been compared to buying a house and renting an apartment. With a car purchase , you make the monthly payments until it's paid off and your lender hands you the car title. The car is yours. Just like buying a house, after a certain number of mortgage payments, the house becomes yours. In an automobile lease, it's just like renting an apartment. You keep paying the rent but the money that you give the landlord goes to him. No portion of it in the form of equity goes back to you. You can say your money goes to waste. But you had a place to stay and as far as leasing a car, you have a car that is useful to you, that enables you to go places.
Leasing isn't for everybody; buying a car isn't for everybody either. They have their own advantages and disadvantages.
With new car ownership, you need money for down payment and that makes the first year of ownership expensive. After that, the costs somewhat goes down but you still have car maintenance and insurance to contend with until it's paid off. Leasing is inexpensive at first, it requires lower or no down payment but remains high each year for as long as you continue leasing.
An automobile lease therefore is for you if you meet the following
You do not drive a lot of miles.
You use your car for business purposes.
You cannot afford a large down payment on a new car.
You would like to or need to have a new car every few years.
You would prefer not to deal with maintenance issues.
You don't like to go through the hassle of having to sell or trade your car when you want a new one.
Most car leases limit you to 12000 miles/year. If you drive less than 12,000 per year, then leasing is for you. If you do and you lease a car, you'll end up owing thousands in mileage penalties at the end. Penalties are usually 18 to 21 cent a mile for exceeding the limit. If you have a three-year lease and you go over 1,000 miles per year, you went over 3,000 miles and at 20 cents, you'll have to cough up $600 in penalties.
An automobile lease may offer tax advantages. If you own a business, generally the tax benefits of leasing are greater than if you buy a car outright. When you buy a car , the payments aren't always deductible, while lease payments sometimes are.
Car buyers who don't have money for down payment might consider leasing. You may or may not have to put a down payment but be careful.
Some people would like to have a new model every year. It's a personal
preference, one in which some people delight in doing. It gives them a kick in owning a new model every few years. Some car models 'tho, especially the sporty ones require a substantial down payment so let's say a BMW's monthly payment is being shown as only $250, the required $3,000 down payment amortized for 36 months actually costs you another $83 per month.
Women especially could be at the mercy of unscrupulous car repair shops. Owning a new car provides them with the peace of mind that comes with not having to deal with car repairs.
And lastly, not having to sell or trade your car when you want a new model is attractive for some people. It's not easy to sell a car
. Trading one at the dealer when you buy a new car surely is a money-losing venture. But an automobile lease
every 3 years is a never-ending cycle though of never experiencing car ownership and which might prove to be more expensive than outright car ownership.