You might be thinking about going out and getting a new car, though it’s not easy to decide whether you should buy or lease your next car. When you have a big load of cash, then just go and buy your car instead of making debt.
Although, you may be in the same boat as what the average person out there is, and as such, leasing a new car can be your answer. However, before you just go out to lease your car, it’s important to consider some of the following facts.
First of all look at your habits of driving
Do you love going on long road trips, holidays, weekend outings or just for joy rides with the family? Or, are you the kind of person who only uses a car to work and back with little driving locally?
Keep in mind, with any lease agreement there is limited driving, usually between ten and fifteen thousand miles per month. Once you exceed these limits you will be responsible for a mileage penalty at the end of your term. This can cost you a lot more as when you buy your car with a loan.
Look at your current financial situation
Generally, a down payment on a lease car is quite low and sometimes you might even get one with no down payment. The installment monthly is also low because you only pay for the time that you use the car and not the total value of the car. So, if your current cash flow is not in the top range then leasing your next new car will be ideal for you.
Consider the length of time you would like to drive your car
Most of the time lease contracts on cars are for a period of 2 to 4 years. After the lease period is over, you may be able to decide whether you want to return it or buy the car.
Leasing is a good option if you chose to drive a new car every 2 to 4 years. Once you decided that you would like to drive a new car every few years, the best length of time for leasing would be three years at a time.
How well do you treat your cars?
Looking after your car is very important when you consider leasing it. This means that the interior and exterior shouldn’t be damaged through negligence, pets or kids. With any car lease contract, there is a stipulation about wear-and-tear. It can be costly at the end of your contract if the car is not in a pristine condition.
Pros of leasing a car
Most of the time, lease agreements on cars only require small down payments or no payment at all. This can help buyers that are strapped for cash or leave them with cash for other things.
It also provides you with payments monthly that are lower than buying with a loan. You basically only pay for the term you use the car, and normally you may look at a two or three-year agreement. The payments may be close to thirty percent less than financing your car.
There is not a lot of maintenance required on a lease car. This is because generally, they are barely used or new with low mileage. Frequently, the cars will still be under warranty of the factory and not in need of any repairs which can save you money for costly repairs.
Leasing means you get more value for money and you can drive a new or different brand every couple of years. This helps you to drive expensive cars that cost you less, as well as providing you with the benefits of upgrading to an exceptional driving experience.
Cons of leasing your car
With leasing a car, it means that you will never own the car while leasing.
If you, pile-up extra mileage more than what was negotiated in your lease agreement, it may cost you a lot of money and eat into your savings. It’s better to arrange before the time for extra mileage on the contract if needed.
Insurance might be expensive on a lease car as some leasing companies may require extra coverage.
Terminating a lease agreement early is not a good option because most leasing companies design the contracts in such a manner to prevent, or discourage early termination. If you are not sure if leasing is for you, take a short term lease and extend it if you are happy with your car.