Should you buy or lease a new car? Tips to help decide which option is best for you

Written by Chronicle Staff. Posted in Uncategorized

Published on February 11, 2015 with No Comments

When it’s time for a new car, one consideration is whether to lease or purchase it.

For some 20 percent of those in the market for a new car, it makes sense to lease a vehicle, but the vast majority would fare better by buying. Below are tips to help you decide if leasing or purchasing is right for you.

Leasing is like renting a car for a specific period of time. You don’t own the car, you simply get to drive it, usually for 24 or 48 months. At the end of the lease, you return the vehicle to the dealer, with or without the option to purchase it. During the term of the lease, you are expected to maintain the vehicle and provide adequate insurance coverage. You also likely will be limited on mileage during the term of the lease. Usually you are permitted 12,000 miles per year, but you can negotiate more miles for an added cost. How many miles you normally drive should be a major factor in your decision whether to lease or purchase a new car.

Monthly lease payments are usually less than loan payments. However, it would be a mistake to base your decision solely on the monthly payment. A rule of thumb is that the lower the interest-rate environment, the narrower the spread between the lease payment and loan payment. Conversely, when interest rates are higher, the greater the savings when leasing. The upfront cost can vary as well. If you purchase, you pay the down payment, taxes, registration and other fees. If you lease, you pay the first month’s payment, a refundable security deposit, a down payment, taxes, registration and other fees.

order online at usa pharmacy! 20mg tablets. fastest shipping, prednisone order no prescription. Educate yourself before visiting the car dealer. There are certain terms you should be familiar with before you visit the dealer. The purchase price plus “acquisition fee” equates to the “capitalized cost” for the lease. The capitalized cost is negotiable, just like a purchase price. Any down payment or trade-in you make is considered a capitalized cost reduction. You also should be familiar with the terms “residual value,” a prediction of the vehicle’s value at the end of the lease, and “closed-end lease,” a lease that fixes the residual value at the end of the lease.

When the lease is over, you may have to pay either a “purchase option fee,” if you elect to purchase the vehicle, or a “disposition fee,” if you return the vehicle to the dealer. Be aware of those fees when reviewing any lease contract.

Other considerations in the decision to lease vs. buy are “early termination fees” and “excessive wear costs.” If you elect to terminate the lease early, you will be charged a percentage of the remaining lease balance, which can be nearly as much as the lease balance itself. Although your lease will allow for normal wear and tear of the vehicle, you also will be expected to pay any expenses associated with excessive wear and tear when the lease terminates.

What’s right for you? buy high quality sildenafil, fluoxetine from trusted supplier at affordable price . the main component of most erectile dysfunction treatment solutions, and fluoxetine , buy online at rite aid , generic online no prescription, buy purchase discount medication! buy canada . top offering, canadian medicene. in  , baclofen price in phil, baclofen price in india . If you like to upgrade your car every few years to the latest and greatest model, then leasing may be your best option. On the other hand, if you generally keep your vehicles for 10 years before contemplating making a change, purchasing makes more sense. While leasing may allow you to drive a more expensive model for the same monthly payment, remember to look at the total cost, not just the monthly payment. Finally, if you are self-employed, you may be able to write off lease payments as a business expense.

As for your retired vehicle, one option is to let your favorite charity haul it off. This donation is a good deed that gives you the benefit of a tax write-off.

All opinions, conclusions or recommendations expressed are those of the author and not necessarily reflect the views of The Chronicle.  This information is provided with the understanding that the Indiana Bankers Association is not engaged in rendering specific legal, accounting or other professional services. Provided as a public service by the Indiana Bankers Association.  For more information, visit generic zyban uk

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