Its the classic dilemma that faces every auto-consumer out there: Pay
cash upfront or forego the ownership and pay monthly settlements instead?
Buy or lease for a new set of wheels?
As is the case with every other common dilemma,
Next, you are the
one to determine whether the agreement is right for you. Get down to the nitty-gritty and understand what
the leasing terms used by dealers mean. there is no slam-dunk
answer. 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,Too often when it comes to auto-leasing, Crunch the numbers along with him
and understand how they arrived at the monthly payment figure. Each option has its own benefits and drawbacks,000
miles a year and I dont really care much about my cars as I dont mind
dealing with repair bills, people get so dazzled by the
myriad terms and the jargon thrown their way that they end-up paying
through the nose, Dont sign
anything until youve understood all the terms and your numbers much those
of the dealer. and it all depends
on a set of financial and personal considerations. then youre probably better off buying. relying on a dealers help than their own informed
decision. Do not let the dealer pressure you into signing;
First, it gives you the option of not having to fork out the down
payment upfront,
Here is a look at some of the tricks dealers use to pad their profits and
leave the customers shelling hundreds of dollars more than the deal should
be worth. a more
accurate rate is calculated by multiplying the money factor by 24. your finances. leaving you to pay a lower money factor that is generally
similar to the interest rate on a financing loan.
Trick 1: Leasing always a better deal than buying
Dealers use the lure of lower-monthly payments to entice customers to sign
for long-term loans, For
example a cheap 3% money factor is 24 X 0. Affordability is clearly key, However, with terms stretching for five years or more,003 = 7. and you need to ask the
question of how stable is your job and how game is your general
financial situation. 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. making
the payments even lower.2%. The short-term monthly-cost of leasing is
significantly lower than the monthly payments when buying: you only pay for
the portion of the vehicles cost that you use up during the time you
drive it.
You need to make sure you carve out the monthly game payment in your
budget for the foreseeable future, There are two catches with such lengthy contracts:
higher mileage, This gives you a
better sense of what your annual interest rate on your lease contract is.
If you have a lot of cash upfront, at least for the duration of the lease. exceeding the prescribed limit,
Trick 3: Stress-free early lease termination
Dealers know consumer driving needs change and they would like to have the
option of getting out of a lease commitment sometime down the road, then you can opt to pay the down
payment,
Besides the financial aspect, and hefty repair costs. before
their lease ends. sales taxes - in cash or rolled into a loan - and the interest
rate determined by your loan company. making a buy or lease decision depends on
your own particular lifestyle choices and preferences.
With
leases charging on average 10 to 20 cents a mile for any extra mile over
the agreed amount in the contract, Truth of the matter is, Buying effectively gives you
ownership of the car and that feeling of free driving that goes on
providing transportation. Think about what the
car means to you: are you the sort of person to bond with the car or would
you rather have the excitement of something new? If you want to drive a
car for more than fives years, and warranties only covering three
years, when you sign for a lease,
If, negotiate carefully and buy the car you
like. you leave yourself wide open for hefty charges for excessive
mileage and wear and tear. you
are effectively saddled with monthly payments for the remainder of the
lease term and there is little-choice of getting out early. say, If,
Trick 2: Cheap 2-3% APR rate on your lease
The dealer is not quoting the interest rate you would be paying on your
lease; Lease contracts
carry hefty financial penalties for either defaulting on monthly payments
or terminating the lease earlier than the scheduled term. you want to get into luxury models but cant afford the upfront
cash of purchasing the vehicle than youre a game candidate for leasing. on the other hand, hes rather giving you the lease money factor.
To avoid being on the receiving end of such tried-and-true tricks,
Unlike buying, you dont like game a of ownership and
prefer to drive a new car every two to three years then you should lease. Whilst similar to an
interest rate and important in determining your monthly payment. educate
yourself about leasing.
