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.
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