Tuesday, 21 August 2012

Is It Smarter To Lease Or Buy Your Next Car?

We’ve all heard the terms ‘lease’ versus ‘buy’ in regards to automobiles. So when we start that dreaded car shopping experience we brace ourselves for the onslaught of terms, like financing and payment options, lease or purchase, sinuously spewing from the mouth of that overly-eager car salesman. Don’t get caught under his nebulous spell. If you do your homework before stepping foot into that car showroom, then you can feel confident in your decision making processes. Just in case you don’t know the differences or are unsure about what might work best for you long term, let’s explore the two options and weigh the good versus the bad.


Lease or buy that shiny new car?

Auto leases: Well, we’ve all heard that adage: That car you just bought began to depreciate the very second drove it off the lot. But you fooled all those naysayers, you didn’t buy the car, you’re leasing. What does this mean exactly? Well, first of all, you don’t have a lot of extra cash sitting around so leasing helps your situation since you’ll have a much lower down payment and your monthly payments are also going to be lower, remember you are only paying for the cost of depreciation, so you pay much less money each month than your purchasing brethren, but there are some unforeseen costs involved too. If you are someone who drives a lot, this is another area to take note of. Lease companies will often charge extra for mileage exceeding 15,000 miles generally between .15 and .25 cents a mile. Don’t forget that by leasing a car you will never be free of those monthly payments and you are responsible for all wear and tear costs on the vehicle, something that you should really consider since you constantly drive around with your five golden retrievers. Thank goodness you’ve got options; because a lease has set time limits, at some point you’ll have to choose: will you trade this car in at the expiration of the lease or look into purchasing? This will be difficult for you because you’ve really enjoyed this car, her name is Betsy by the way, and Betsy has been extremely reliable, as a matter of fact the thought of abandoning her to some other driver causes you a moment of panic. Not to fret, again, you’ll need to do some more research to see if Betsy’s outstanding balance is worth taking on or maybe you’ll have to break her heart a little and find someone new. It’s decision time, you love Betsy, but quite honestly she’s lost some of her initial charm and luster, what with all that dog hair. What’s really pulling on your heart is something a little sleeker and maybe a little sportier. You’re suddenly needing a little more freedom in your life, you bid Betsy adieu when your lease is up and drive off in that sportier model, Daphne.




Saving money makes sense.

Purchasing: You’ve coveted auto trader since you were a young boy, hiding them in-between your mattress like forbidden skin magazines. Your boyhood room was plastered with posters of muscle cars and there is only one car you for you; a 2012 ZL 1Coupe, cherry-red with black racing stripes and supple leather interior. Your heart races with that mental image of you behind the wheel, the looks of awe and appreciation you’ll undoubtedly receive from the ladies, the feel of that gear shift in your hand while you navigate your regal way among the common masses. You scoff at those poor souls, stuck in that 1980’s standard model sedan or heaven forbid--the totally uncool minivan. You shake your head and pity their sad existences until you start examining the cold hard facts; namely cost. You’ve been saving up for a long time, but, wow, you didn’t really factor in a lot of these extras; you love those chrome hubcaps, you agree with the salesman that they really do bring out that vibrant red, you can even see your giddy face when you peer into them, but you didn’t realize how much extra they cost. That calfskin leather that caressed your skin like a breath of heady tropical breezes is only going to add to that already hefty price tag. For the first time since stepping into the showroom, you’re starting to sweat a little, and it’s not from just excitement. It’s about all those little things you kind of forget to include and are adding up quickly. But you’re in it for the long run, you’ll never sell this baby off. True, you’ll have a bigger down payment than the lease option, higher monthly payments, oops, it appears your insurance company doesn’t really like these cars either, no matter, this is your dream car. And you’ll never settle for anything less. The thought of some other man’s hands touching any part of her causes your heart to clutch. Nope, you bite the bullet and buy her outright. As you sign your life away, you pray that you may live long enough to actually reach that last payment coupon.


For the type of person who really likes driving new cars each year or so or someone who is a little cash-strapped and doesn’t want to put down that large down payment, leases are a great option. If on the other hand, you know that you’ll drive this car around until the wheels fall off, purchasing would definitely be the better way to go.









Mark McCrell is an auto aficionado who loves to drive his 1974 Buick LaSabre around town and write about all things auto. He currently blogs for the website AutoInsuranceQuotes, which specializes in cheap auto insurance.