12 Month Car Lease
If you’re one for buying all the cars you’re going to use, this may seem really odd. But leasing isn’t renting as some might perceive it and it isn’t so much more expensive. In fact when you think about it, having a 12 month lease on a car can actually save you a lot more money on the long run than actually purchasing a car.
If you purchase a car, either you have to put down let’s say about $25.000 if you want to get a decent new car. Or, in case you don’t have that much cash, you’re going to have to finance it somehow. Let’s say for argument’s sake, that you get a $25.000 loan for that car. Well in doing so, you lock yourself to that debt until it is paid. Let’s say that you make a contract for 5 years and with the usual 9% interest. If you do the math you will realize that you’ll pay $2500 more than the car is worth (while the car itself suffers depreciation at least as big), bringing it at a monthly fee of approximately $450.
On the other side leasing the same exact car for 12 months, you will not be paying more than the depreciation suffered by the car during your use on it. So let’s say that the depreciation comes to approximately $5.600. If you divide that in 12 months you’ll see that the fee is $466, only a few dollars more than your loan. Keep in mind that you don’t have to keep it after 12 months. You can very well go to the dealer and ask for the exact same car again only new and for the same contract.
So, instead of having to pay $27.500 dollars for a car that will depreciate and worn out gradually over 5 years (until you will finally be able to call it your own), you get to pay 5600$ during one year alone, and save over $20.000 dollars in the process, which you can very well use afterwards in getting another new car to lease.
Another big advantage when it comes to leasing a car for 12 months is that the entire time you are covered by warranty, so no matter what happens to the car, you’re covered from all sides. So therefore why drive a five to seven year old vehicle and with the same money when you can get a completely new one each year and pay just about the same, even less in some cases. Search the market for competing companies and present your case to the company you would like to lease from, and you can get a top deal each time.
The few disadvantages are not enough to be a drawback. One of the few is the fact that the vehicle is limited to an interval usually between 12.000 – 15.000 miles per year. If you plan on driving a lot more than that, than maybe you should reconsider, since leasing get’s very expensive once you’ve crossed the line. You might end up paying 25 cents for any extra mile you make. You can buy more miles at the contract signing but it might end up pretty expensive.
If you’re a careless person, once again you might attract the “wear and tear” fees. These enter into effect in case you bring back the car at the end of the 12 months with: scratches, rips, torn upholstery, broken knobs and switches or even dirty and messy inside and out. But that’s just common sense since you’re the one driving the car.
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