No one wants to purchase a car hastily. But when you need a car quickly, it may not feel like you have a lot of options. If you need a new car but you want to save money, then leasing a vehicle may work for you. Read on to get our tips for figuring out whether leasing is a good option for you now:
There are several pros to buying a car–namely that you will own it. Just like home ownership, car ownership builds your credit and gives you equity for when you are applying for other loans. A bank wants to have collateral should you default on your loan. Owning a car gets you that collateral.
There are several cons for buying a car, most of them around ease and convenience. For example, when you buy a car, you’ll need to make a down payment that could cost you thousands. In addition, when you own a car, you’re in charge of all of the costs associated with repairing it and maintaining it. Over time, those repair costs can add up. All it takes is one dead compressor or battery!
Leasing is a great option for a driver who does not have a lot of cash in savings for a down payment and who doesn’t mind not owning the car. Often, leased cars have a lower monthly payment — especially if you select to lease a car with a low sales price.
The price of the car determines your lease payment each month. In addition, when you are reading the details on your leased car, you’ll see something called the residual value percent. High residual value percents will lead to lower lease payments. This is an estimate that accounts for the depreciation of the car.
Leasing a car puts all of the responsibility of repairing and maintaining it on the dealer, who is the owner of the car. If something goes wrong, the dealer takes care of it. In addition, your car will be new and likely will be under warranty for the duration of the lease.
Finally, when your lease is up, simply turn it in and pick out a brand new car!
There are two main cons for leasing, depending on your opinion in the matter. Obviously you won’t own the car at the end of the lease — but you can opt to buy it at the end of the contract. In addition, most leases have limits on the amount of miles you can put on the car, so make sure you understand your boundaries before signing a contract.
If you go over your miles, the dealership will charge you — and you don’t want to rack up unnecessary fees! One great way to determine if you can stay within the mileage limits is to watch your mileage accrual for one month. On the first day of the month, simply reset your mileage tracker and on the last day multiply that number by 12. You’ll get a good sense of how much you’ll put on your leased car in a year.
Now is the Time to Lease A Car
Is now YOUR time to lease a car? Don’t wait any longer to save money and to get a car you love! With these tips, you’re ready to make your decision.