One of the eternal questions of the auto would has yet to be answered: is it better to buy or lease a car? We can’t provide the definitive answer for everyone, but we can offer insight into which is the best route for you! Whether to buy or lease a vehicle is a decision best made with individual preferences and financial philosophies taken into consideration. In the following six blogs we will offer you practical information about vehicle leasing, types of leasing and contracts, cost calculation, and locating good lease deals. By the end of this series of blogs on leasing, you’ll know just what to do.
The popularity of leasing rises along with the cost of new cars. The main economic benefits of leasing come in the first year, and include the advantage of putting forth a minimal down payment, making lower payments each month, and paying less in sales tax. This means you can drive a brand new car without completely shocking your wallet. You pay some or no money up front, and your monthly payment amounts are smaller than most new auto loans. In the long run, leasing can be a bit more expensive than buying, but that is where the personal preferences come in. Some drivers prefer to pay a little more in the long run in order to enjoy a brand new, upgraded vehicle every few years.
Understanding Auto Leasing
Either you have already made the decision to lease a vehicle, or you are still weighing your options. Either way, you’ll want to inform yourself as much as possible about the leasing process. We have put together a series with six blogs on auto leasing so you know exactly what you’re doing before you sign along the dotted line. The following concepts and information will be reviewed:
- Types of Leases — There are two main types of leases, open-end or closed-end. Which is the best option?
- The Lease Contract — It is important to familiarize yourself with terms such as depreciation, MSRP, cap cost, cap cost reduction, and residual value, and how they relate to the lease contract.
- Calculating Monthly Costs — The formula for calculating monthly lease payments has many components, but it is actually quite simple to learn. It is to your benefit to arm yourself with this information before trying to negotiate a lease deal!
- Finding a Deal — Once you understand what to look for in order to spot a great lease deal, you will be able to weed out the manufacturer deals that are not worth your consideration.
- Closing the Deal — If you become comfortable and knowledgeable about how to negotiate a lease deal, you can save yourself a lot of money and gain some hefty bragging rights!
- Driving into the Sunset — There are important things to know about your lease obligations and how to keep up your end of a lease deal. Also, several considerations need to be made in regards to ending your lease.
Arm Yourself With Information to Score the Lease Deal You Want on the Car That You Love!
The best way to get the most affordable lease deal on the car you would really love to drive is to educate yourself about the whole leasing process, leasing formulas, and leasing vocabulary. You can start with learning about the types of leases and which one is the absolute best option for you in our next installment about auto leasing: “Types of Leases: A Closed-Ended Question”.
February 14, 2013 by Jamie Rettig