When it comes to leasing or buying people always have different opinions. Some of them say that at the end of the leasing term you don’t have anything to show for your money. People that say that don’t take into consideration the fact that, leasing makes the buyer pay for a given period of time of his choosing. On the other hand, buying means either a lot of money or a big finance, for which you have to pay for many months. The online calculating system from Smartmoney.com is able to show you the best road to take. Yet take heed that the system has been designed to compare leasing and buying, it doesn’t take financing into calculations. Since that is a very volatile and unpredictable option it makes it a lot harder to take into calculation.
Buying A New Used And Leasing A Car
Both sides have advantages and disadvantages. Some of the advantages are: Low down payments, despite the fact that many leasing deals are advertised with a claim on a down payment you can simply ask the dealer to limit it. The thing is that, the more cash you pay on the down payment at the contract singing, the less you will have to pay on monthly fees.
Since you pay only for the car’s depreciation, you have reduced monthly payments, compared to ones you would have to pay for a much longer period of time if you decide to finance the car.
And finally, the easy turnover option allows you to simply go back to the dealership when the 2 years lease expires (assuming that your car has been maintained properly and is in good shape) and you can simply ask for another brand new model for the next 2 years. That’s a great way to avoid the headaches gained from trying to sell it as a used car, or haggling with a dealer.
There are also some downsides to it as well, the first one being the lack of equity. Since you are simply paying a rent just like in an apartment, your leasing terms don’t finalize in owning anything. Compared to traditional financing, you cannot look for a day when you can finally say the payments are over and you’re heading on in YOUR car.
Another upsetting thing is the lack of flexibility. In case you have or want to get rid of the lease before term, you’re faced with the predicament of paying a high penalty fee that can be the equivalent of 4-6 months of payment, depending on the leasing company you choose.
You may find that the constrictions set on your vehicle may be unsettling. For example, just about any lease contract implies that for every extra mile you drive over a specified limit, you have to pay somewhere between 12 and 15 cents (which is ridiculously high). Usually you are limited to a number between 12000 and 15000 miles per year which is the average a driver makes. Keep in mind that you have to take very good care of the car, since each little damage sustain that’s over the usual wear and tear is deductable from your pocket. A good way to get rid of the mileage restriction is buying extra per year, at a reduced cost of an average of 10 cents.
And finally, you may not be well covered by insurance. In case of car theft or an accident in which the car is completely smashed, the insurance company will only cover the car for it’s market value, leaving you with your lease active and no car.