Car, When to Lease a New Car |
Many individuals that are in the market for a new car but are looking for lower monthly payments consider the option of buying a used vehicle. These individuals pull out a loan from a bank to finance the purchase, and then have the used car. After the low loan payments have totalled the cost of the car, the car is theirs, and they have no more monthly car payments. But sometimes, leasing a new car is a great way to find a payment for a vehicle that is between the higher cost of purchasing a new one, and the low cost of leasing one. Leasing a new car comes directly from the dealership. You go through the process of buying the car, but the terms of financing and ownership are drastically different.
If you are the kind of person who gets tired of your vehicle after a few years, leasing a new car is definitely the way to go. Leases can go for anywhere from one to four years. You choose the length of the lease, and also the amount of miles you expect to put on the car over the course of one year (usually the choice falls between 12,000 and 15,000 miles). You sign the lease, and have your new car. The car is then yours for the length of the lease. Once the lease has ended, you must return the vehicle to the dealership. After the lease is up, you have one of two options; sign a new lease for a new car, or purchase the car that you've been leasing.
If you choose to purchase the vehicle after the lease, you are then financing for a "used car". This used car, however, is the car that you've been driving; you know everything that has happened to it, and know if it is a reliable vehicle or not. Because the dealer has set the cost of purchasing the vehicle after the lease, you finance that payment through the dealer, and can plan accordingly well ahead of the end of your lease. This allows you to keep a somewhat cheaper cost for a car payment for a few years, and continue that lower payment through the car financing loan after you have driven it. You will then technically are paying for a used car, but you have been the sole owner.
Leasing a new vehicleis not for everyone. Leasing is the best option for people who like to have different vehicles every few years. Leasing is not the most cost effective way or purchasing a car; you are making constant payment. When you piggy back one car lease after another, you will never actually "pay off" the cost of the car, and therefore will have car payments the entire length time that you lease vehicles. Those who plan to purchase after the lease have the best of both worlds. Leasing a car can be the best way to go for those who do not mind a consistent car payment. |
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