Is an Affordable Car Lease Right for Me?
The majority of car buyers are unsure whether or not leasing a car is a good thing. Well it depends on your situation and your end goal or motivation behind getting the vehicle.
It also depends on what you know about leasing a car. An affordable car lease can be negotiated much in the same way as buying a car. On the other hand you can get taken to the cleaners depending on the leasing company.
Leasing is not for everyone but if you're going to be trading cars every couple of years anyway, this many be the way to go.
Critics will claim that leasing is poor money management. One of the biggest arguments against leasing is that you don't own the car at the end of the lease and therefore have no trade in when it's time for a new car. However when you do the math on an affordable car lease that has been properly negotiated and is fair to the consumer and you compare it to the money spent over the life of a typical car loan, the overall savings with the lease can be significant enough to justify it.
It also depends on what you know about leasing a car. An affordable car lease can be negotiated much in the same way as buying a car. On the other hand you can get taken to the cleaners depending on the leasing company.
Leasing is not for everyone but if you're going to be trading cars every couple of years anyway, this many be the way to go.
Critics will claim that leasing is poor money management. One of the biggest arguments against leasing is that you don't own the car at the end of the lease and therefore have no trade in when it's time for a new car. However when you do the math on an affordable car lease that has been properly negotiated and is fair to the consumer and you compare it to the money spent over the life of a typical car loan, the overall savings with the lease can be significant enough to justify it.
When To Lease Or Buy
What's Your Lifestyle
But why lease rather than buy? If your end goal is to drive the car for a more extended period of time, maybe even for the life of the car then a lease is probably not for you. But if you are someone that figures you'll always be upgrading your vehicle and always have a payment which is what a lot of people do then an affordable car lease makes sense.
It is true that when you buy a car you have something to trade in. However a car is an asset that depreciates in value very quickly. If you buy a car and make payments until your loan is paid off, yes you own the car but the value has also dropped significantly. Let's say the total amount you spent over the life of a car loan including interest was $30,000 and that the trade in value after a 5 year loan is only $15,000 so you could say you have a loss of $15,000. With an affordable car lease it's likely that you would be on to your 2nd or 3rd new vehicle with about the same amount of loss overall or less.
It is true that when you buy a car you have something to trade in. However a car is an asset that depreciates in value very quickly. If you buy a car and make payments until your loan is paid off, yes you own the car but the value has also dropped significantly. Let's say the total amount you spent over the life of a car loan including interest was $30,000 and that the trade in value after a 5 year loan is only $15,000 so you could say you have a loss of $15,000. With an affordable car lease it's likely that you would be on to your 2nd or 3rd new vehicle with about the same amount of loss overall or less.
Breaking a Car Lease
There Is A Way Out
New model, moving overseas, financial problems? There are plenty of reasons why someone might consider breaking a car lease. However there can be some financial repercussions depending on the fine print of the lease agreement and how you go about it. Buyers, or signers on a lease, often think that leasing a car is a lot like renting a car, but, they are two very different situations. Renting a car carries no obligation other than to return the car by the time and date agreed upon and pay the one time rental fee. Renting is always for a very short term.
Leasing on the other hand is for an extended time period usually 2 or 3 years. With leasing there is a legal contract to make the lease payments for the life of the lease. When it comes to breaking a car lease there are typically some stiff penalties in the fine print of the lease agreement. Most likely the leasing company will require that you either pay off the balance of all the lease payments or purchase the car. Obviously it is not in the buyer's best interest to go with either of those options if the buyer is no longer going to use the car.
Leasing on the other hand is for an extended time period usually 2 or 3 years. With leasing there is a legal contract to make the lease payments for the life of the lease. When it comes to breaking a car lease there are typically some stiff penalties in the fine print of the lease agreement. Most likely the leasing company will require that you either pay off the balance of all the lease payments or purchase the car. Obviously it is not in the buyer's best interest to go with either of those options if the buyer is no longer going to use the car.
Here's my favorite link:
by carbuyer99
Just like you, I've bought new and used cars from dealerships and always felt like I paid too much. Now I'm fighting back and loving it. (more)
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