Auto Lease
In our times of rapidly changing technology, people want the latest most exciting new model. This trend in computers and cell phones has crossed over to vehicles as well.
Benefits to Auto Leasing:
Affordable monthly payments
Brand new car
Full warranty covering repairs and tune-ups
No responsibility to vehicle at end of lease
Incentives to get a good deal on a brand new car at end of lease
Option to buy vehicle at end of lease
Builds good credit
Keep up with trends and new technology
Drawbacks to Auto Leasing:
After 3 or 4 years of payments, you have no vehicle
Depreciation Makes Auto Leasing Look Good:
If you get a good auto lease deal, your monthly payment will be only slightly higher than the amount that the car devalues every month. The value of the car drops the minute you drive the car off the dealer lot. This means that if you buy the car and sell it 3 or 4 years later, the amount that you can sell the car for will be minus a few thousand dollars, the same few thousand dollars that could have equally gone into an auto lease, which has a much lower monthly payment than the high auto purchasing monthly payment.
To pay near the same amount per month for your car lease as your car depreciates each month makes it so you are not actually at a financial loss because if you bought the car, you would lose that money anyway. For someone who leads a busy hip life and has little money to put towards a fancy car, auto leasing can be a better option than purchasing.
Wheelin and Dealin:
To get a good deal on an auto lease, know the wholesale price of the vehicle you want. Offer slightly more for the dealer's commission. State how much you want to pay per month and for how long within reason, based on their advertisements. Car leases are usually 3.5 to 4.5 years long. A longer lease will have a lower monthly payment but requires more commitment from you.
If you know you want a new car every few years, auto leasing might be better for you than purchasing. You will have lower monthly payments, therefore more freedom to do other things with your money, and at the end of the lease, you are free to choose a new car.
