Many motorists lease vehicles rather than purchasing new cars. Car leasing can prove to be a good option for some but for many it is not. Before you consider leasing a car as the answer to your prayers, you should understand the various pros and cons of a lease, how to get the best deal and the other factors related to leasing.
Leasing a Car:
When you decide to lease a car, you fail to own it. You are allowed to use it during the specified lease term but it must be returned at the end of the lease. However, in many leases you have the option to buy the car at the end of the term.
The Advantages of Car Leasing
There are three main reasons for leasing, rather than buying, a vehicle:
•People usually pay less by leasing than buying. This is the best option for those who love to drive new cars for few years. The question of getting rid of your old car also does not arise as the car is returned at the end of the lease term.
•As expensive cars are difficult to afford for some, people opt for lease. Lease payments are generally lower each month than loan payments for any given car.
•Car leasing gives you the option to change your car at the end of the leasing period rather than being stuck with a car that may have become worn out or outdated.
The Disadvantages of Leasing a Car
Although you may be fervent to drive an expensive new set of wheels, you need to consider the following disadvantages of leasing a car before you make your final decision:
•Continually leasing your cars will put you in a state of immeasurable car payments.
•If you decide to buy the car at the lease-end, you will pay several thousands of dollars more than, if you had bought it initially.
•Twenty-five percent extra per mile is levied if the annual set mileage exceeds. If you drive extensively, than leasing is probably not advisable.
•If you want to terminate the lease early due to some personal financial reasons than you will have to pay a hefty termination fee or the interest of the remaining months.
•You can never consider yourself the owner of the car.
•You will need to arrange a comprehensive car insurance as you will be effectively driving someone else's car.
Getting the Facts before You Lease
Before leasing a car, you need to be aware of the final cost. The Federal Consumer Leasing Act specifies that the lease agreements should include agreed-upon value of the vehicle, a statement of costs, insurance specifications and penalty for default lease payments.
However, the dealer does not need to disclose the "interest rate" that has been agreed upon. Many lease agreements are drafted ambiguously with primary contents buried in the fine print.
You should be diligent to properly calculate the final cost, compare the rates and read the fine print.
Maintenance and Repairs during the Lease Term
The lease agreement specifies maintenance and repairs during the lease term. However, you can save maximum dollars if you include "gap insurance". Gap insurance pays the difference between what you owe under the lease and what the dealer can recover on the vehicle, if the car is stolen.
Getting a Good Deal
The lease deals that are heavily advertised by car manufacturers are often the best but you need to research and then go for it. They usually offer low monthly payments or a high turn-in value for the vehicle at the end. In addition to it they may offer to lock in the price you would have to pay at lease-end end if you want to keep the vehicle.
Thus, before leasing a car it is very important to study the pros and the cons, to prevent yourself from paying much more than what you must have actually considered.
Published At: Isnare.com
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