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To Buy Or Lease A Car

February 27, 2012 | Comments: 0 | Views: 141

Up until the last two decades or so, leasing a car was something that corporations did, not something that most individuals attempted, or even heard of!

Today, leasing a car is a very viable option and is commonplace; in fact, almost of equal number of newspaper ads show monthly lease amounts vs. MSRP's. There are many pros and cons to buying OR leasing and this question burns upon the minds of many!

Leasing is certainly not for everyone. You are limited to the miles you can drive, you never develop any equity in a vehicle and you must have good credit.

Generally, when leasing, the term is set for a period of 36 months, sometimes longer or shorter. During this period there is a limitation on how many miles you are allowed to drive the car and should you go over those miles, hefty fees per mile will occur ($0.15-.20/mile is common). The allowable miles are generally published in the amounts of 12,000/year although seeing leases with 10,000 or 15,000 are not uncommon. This limitation is not for everybody, as some drivers would go way over these boundaries!

If this parameter works for your lifestyle, and you enjoy driving a new car that is always under warranty, then leasing could be for you. As long as you have excellent credit you can be eligible to lease. (Some leases are longer and take you driving beyond the warrantee... Not Advisable!)

Other people don't like the idea of not "owning" what they drive. Although financing a car will require much more money up front and bigger monthly payments than leasing a similarly priced vehicle (and the bank has the title of the car until it's paid off), many people want to feel a sense of ownership and equity. And once the car IS paid off, then there are no more monthly payments! Often these people would want to hold onto a car longer than 3 years and make repairs as needed to "their" car.

It's true that almost always, if you buy and hold onto a car for as long as you can and do this repeatedly, you will save money over the long run vs. leasing every few years. This is the nature of leasing as you are paying for the highest depreciation of a new vehicle ever 3 or so years. On the other hand, many people don't want to be surprised by a $1000 repair or having a car that could breakdown as it ages.

If you tend to be picky in getting a car, you can lease a new car with the options you want! However, if you end up not liking the car you can't sell it or give it back. Breaking a lease agreement is very costly.

Many people worry about the end of the lease. Buying your vehicle will then cost you the remainder of the car. And many will finance the car at this point as if they were buying a 3 yr. old pre-owned car. The advantage here is that you don't have to worry about any scrapes, dings and dents that occur during the leased term. If you turn it in, you are expected to have these fixed and repaired (anything outside the realm of "normal wear and tear").

Another item that is often overlooked when deciding to buy or lease a car is insurance. Often the leasing agent requires a leased vehicle to be more fully covered than if you purchase. Check with your insurance company if you are considering leasing for the difference in costs.

For a comprehensive look at leasing vs. buying and for excellent and easy steps to negotiate a great deal go to, which is filled with excellent information of manufacturer profit margins and residuals as well as a step by step approach to get an excellent deal!

Source: EzineArticles
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