When you are hunting for a new car, one of the biggest questions you may have is whether you should buy or lease the car. There is no one answer to this question that will suit everyone. Everyone's situation is different, and the decesion of whether to buy or lease a vehicle depends on your individual situation and preferences.
Buying and leasing a car as two ways of financing an automobile. You can lease a brand new car or a used one, depending on what you are wanting. A lease finances the use of a car while a loan finances the purchasing of a car. Both methods are good ones, and there are benefits and disadvantages to both of them.
While you need to consider the financial differences, you should also consider what is important to you. Do you want a new vehicle every two or three years? Would you rather have higher monthly payments but have some ownership in your car? Do you actually want to own your car or do you want to trade up? These are important considerations.
Buying and leasing are very different things. When you buy a car you will pay for the car's entire cost, no matter how many miles you may drive. You usually make a down payment and also pay sales tax which you can sometimes roll into your loan. You also pay an interest rate which is determined by your loan company and is based on your credit. Your first payment is made right after your sign your contract. Later on, you can sell or trade your car for the depreciated resale value.
When you lease a car, you only pay a portion of the cost. You are paying for the time you use the car. This is not the same as renting. You don't have to make a down payment when you lease but you will pay sales tax on the monthly payments, at least in most states. You also have to consider the money factor, which is a financial rate similar to the interest rate that a loan has. You might have to pay fees and a security deposit that you wouldn't have to pay if you were buying. Your first payment is made when you sign the contract for the month ahead. When the lease is finished, you can buy the car for the depreciated resale value or return it for another car.
Tomorrow we'll take a look at how lease and loan payments are different and we'll finish out the rest of the week talking about GAP coverage, benefits of leasing and buying, and other useful information.
Let Manly Automotive Group help you in your new and previously owned vehicle choices today stop by our website today and drive away knowing that you made the right choice with us! Manly Auto http://www.manlyauto.com can also can be found on Twitter https://twitter.com/ManlyAuto and Facebook http://www.facebook.com/pages/Santa-Rosa-CA/Manly-Auto-Group/103413126362572?v=wall&__a=3& stop on over and visit us!