Buy a
brand new car for only $180 a month!
Sounds great - a low monthly lease
payment may seem much more attractive than buying a car. But you should be
cautious, whether buying or leasing, to make sure that you choose what is
right for you.
If you are someone who just has to have the latest
model, you might look into
leasing. Leasing is a good
option if you put fewer than 12,000 to 15,000 miles a year on your car,
and you are religious about maintenance. In return, you receive a lower
monthly payment.
You must remember always, you do not
own the car. When the lease is up, you either return the car or pay a
balloon payment to buy it outright. The purchase value is usually preset
in your contract. You could also trade it in for a new lease.
There are some advantages with
buying the vehicle instead of leasing. If you treat it right, and get a
good financing package, the vehicle will usually be worth quite a bit when
you finish paying for it. In as little as three years, it may be worth
more than you owe.
Most people must finance a vehicle
for at least four and even five years to make the payments low enough. By
the time you are finished with your payments, your car may be well worn.
If you drive more than 10,000 to
15,000 miles a year, you may not want to lease a vehicle. If you go beyond
the contractual mileage, you will have to pay hundreds, even thousands, in
extra mileage fees.
If you want to reach a point where you don't have a
car payment, then you don't
want to lease. If you don't
mind the payment, the leasing will allow you to get a new car every three
years without making a substantial down payment.
Taking good care of a leased vehicle
is essential. The contract requires that your return the vehicle in good
shape, fully maintained. If you plan to modify the vehicle in any way, you
could find that the leasing company will want compensation.
Look at your life. If you see that
changes are coming, you may be better off buying. If after two years you
need a larger vehicle, you will pay a bunch of money to break the lease.
Buying gives you a better way of changing your
mind.
