Buy or Lease?
Buy or lease for a new set of wheels?
on a set of financial and personal considerations.
First, check your finances. It is important that you are able to afford the vehicle. Ask yourself, how stable your job is and how healthy you are financially. The short term monthly cost of leasing is definitely lower than making monthly payments on buying: you essentially pay only the portion of the car that you use up upon the time that you actually drive it.
If you have a lot of cash up front, then you can opt to pay the down payment, sales taxes – in cash or rolled into a loan – and the interest rate determined by your loan company. Buying effectively gives you ownership of the car and that feeling of “free driving” that goes on providing transportation.
similar to the interest rate on a financing loan.
payments will result in stiff financial penalties and can ruin your credit. You need to make sure you carve out the monthly lease payment in your budget for the foreseeable future, at least for the duration of the lease.
car means to you: are you the sort of person to bond with the car or would you rather have the excitement of something new?
If you want to drive a car for more than fives years, negotiate carefully and buy the car you like. If, on the other hand, you don’t like the idea of ownership and prefer to drive a new car every two to three years then you should lease.
Next, factor your transportation needs: How many miles do you drive a year? How properly do you maintain your cars? If you answer is: “I drive 40,000 miles a year and I don’t really care much about my cars as I don’t mind dealing with repair bills”, then you’re probably better off buying.
Leasing is based on the assumption of limited-mileage, usually no more than 12,000 to 15,000 miles a year, and wear-and-tear considerations.
Unless you can keep within the prescribed mileage limits and keep the car in a good condition at the end of your lease, you might incurhefty end-of-lease costs.
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