Am I better off leasing or buying a new automobile this year?
Owning vs renting? If you are one of the lucky ones in the position to be thinking about whether or not you should buy or lease a car this year your decision is probably harder than ever. There are a number of variables that go into whether or not you should buy or lease an auto. For instance you need to know: how far you drive, do you tend to change cars often, do you have the down payment for a lease and what monthly payment are you trying to get for your vehicle. If you know the answers to these basic questions then you might be able to look further at does leasing make sense?
Is Leasing a New Auto a Good Idea?
Should I rent or own my car? There are many differences between owning and leasing. When you own and you finish paying off your loan the car is yours. You have something to show for your payments and you can keep the car as long as you want. Good or bad it is your vehicle. When you enter into an auto lease it's like a car rental, you don't own the car at the end of the day. You get to pay for borrowing it for a certain amount of time and after that time is up you give it back.
Deals on new cars right now are some of the best deals we have seen in the auto industry for decades. With the bankruptcy of major car companies the need to move inventory is making it a buyer's market. You can buy the car you want at thousands less than you could have a year ago. This new twist might cause conflict in your decision making process. But if you don't have the money to buy a new car outright you still should think about the option to lease an auto.
Car Rental vs ownership? The most important point and the most positive key about leasing is the monthly payment that you pay during the term of the lease. The monthly payment is considerably lower than the monthly payment for the car you might buy. However, you also have to give it back. If you are one of those that like to trade in cars every two or three years and have relatively low mileage then leasing the car might make sense for you. The leasing options that are available today will work with just about any financial situation and in the long run if you are strapped for the monthly payment you might have to think about auto leasing.
Auto leasing is very popular for individuals who like variety and opt to trade in their car often anyway. In that case, you can lease an auto as long as you are not a high mileage driver. Additionally leasing usually puts the maintenance squarely back on the company. Most leases have full maintenance written into the contracts.
One more consideration for your decision making process is the down payment. The down payment for a lease tends to be considerably higher than the down payment for a purchase. This lump sum, upfront payment is the reason many leasers decide against the deal. However, many car companies are coming up with creative ways to work around the down payment issue. Additionally with the difficulty in getting credit these days the monthly payment for new car sales can be just as daunting.
Before you lease an auto think through the following: What down payment can I afford? What monthly payment can I afford? Do I drive more than twelve thousand miles a year? Do I usually turn my car in before the loan is paid off? If you answer these questions you will likely have the answer to does leasing make sense.
