Leasing a Car vs. Buying a Car

Leasing a Car Vs. Buying a Car Unless you have about $20,000 sitting around, you are going to have to finance your car purchase. When you buya car, the entire purchase price is financed, even though the car is no longer worth that price the minute you drive it off the lot. When you lease a car, you finance the cost of the depreciation of the carwhile you'e driving it. Leasing a car Buying a car Because you'e not buying the whole car, monthly payments are generally 30% to 60% lower when you lease. Mileage limits are not a problem. You can drive across the country if you want; it's your car. Their half Your half If you're into cosmetic modifications or maximizing your car's performance, you'll be able to do whatever you want to your new car. Depending on the terms of your lease, you can get a new car every two to four years. A typical lease lasts half the time of a typical car loan. Once the lease is up, you can move on to the next car. Americans will average $700 on car modifications, or $18 annually. It's all yours! At the end of the financing period, the car belongs to the owner, not the bank or Repair and maintenance are usually covered in the lease. car dealership. This saves the average car owner up to $1200 a year on fees. Leasing also allows you to drive a car that could be out of your price range otherwise. You should be able to lease a car without a down payment. It's actually recommended that you put nothing down when you lease, because you could lose your down payment if you have to terminate the lease orif the car is wrecked or stolen. The average monthly payment on a pur- chased car is $479. Most leases won't cost more thạn $275 per month. BMW 328i Toyota Camry For example, the BMW 328i can be leased for three years for the same monthly payments that it would take to purchase a Toyota Camry. Leasing a car Buying a car Depreciation is a killer. The BMW deal sounds awesome, until you find out that there are some catches. A new car will depreci- ate an average of $3,392 per year during the terms of the financing. @#$%! In the first year alone, the car will And then it will lose 10% depreciate 15 to 20%. of its value annually. You have put down $2500 up front, which is generally not recommended for leases. If the car is wrecked or stolen, you will not see that money again. Thanks to the interest on your loan, you will be upside-down in terms of how much you're paying versus what the car is worth. The mileage limit is 10,000 miles per year. The typical new car owner will only put down 5% of the purchase price. This doesn't even cover the costs of sales taxes and other fees. Most people drive at least 15,00o miles a year. The terms of your lease will usually charge between 15 and 30 cents for every mile you go over. That BMW contract charged 20 cents per mile. A recommended down payment is more like 20% or more. Assuming you drive 15,000 miles per year, you could rack up a $3,000 fee when you turned in your leased car. $2500 + ($420*x36 months) + $3000 = $20,620 * an estimate A leased car is a borrowed car. Excessive wear and tear will be held against you. A leased car can not be modified in any way. New sound systems, exhaust systems, or after market engine tuning is taboo. information provided by: www.Autolnsurance.org Sources: http://www.leaseguide.com/leaseo4.htm http://www.edmunds.com/advice/strategies/articles/1o2677/article.html http://www.autosite.com/content/buy/finance/index.cfm/Action/ABCsLease http://www.fivecentnickel.com/2009/11/05/how-much-to-budget-for-car-maintenance/ http://www.leasecompare.com/autoleasei01_6.php http://articles.moneycentral.msn.com/SavingandDebt/SaveonaCar/ABCsForAGreatCarloan.aspx http://www.edmunds.com/advice/leasing/articles/102826/article.html http://editorial.autos.msn.com/article.aspx?cp-documentid=435651 http://www.hsh.com/autosample.html http://www.bankrate.com/finance/auto/sizing-up-your-down-payment.aspx http://www.ftc.gov/bcp/edu/pubs/consumer/autos/autn.shtm ADVANTAGES DISADVANTAGES