Leasing a New Car Is it Meets your needs?

By: Mark Etinger

Whether to buy or lease? Here is the dilemma that confronts every automobile consumer: It is often difficult to determine whether you should pay to own, or, make monthly lease payments instead. Now, unfortunately, this among the those common dilemmas to which you don't have perfect answer. In truth, each option has its benefits and drawbacks, also it can depend on your particular set of financial and personal considerations.

For example, affordability is clearly a key consideration -- you should think of job stability, and your your general personal finances. In general, the short term monthly cost of rental is much lower than the monthly payments when buying a car. When rental, you largely only pay for "the portion" of the vehicle's cost that you consume should you drive it.

However, when you've got some cash up front, you might be able to afford both the down payment and sales taxes on a car. Then, you just might get a loan and a good interest rate, so as to buy the car. When you buy a vehicle, it effectively gives you ownership of it, and a certain degree of freedom that you do not need with a leased motor vehicle.

On the other hand, If you need to drive a luxury model, but cannot afford the down payment and credit terms, you are a good candidate for a lease. Unlike purchasing, it affords you the option of not having to deliver a payment in advance. As well, your monthly payments could be more affordable for your budget.

Be wary, however, because leasing benefits have a price to pay! For instance, terminating a lease before or defaulting on your monthly lease payments, may result in stiff financial penalties and ruin your credit. You must ensure that you have monthly lease payment that are within your budget for the foreseeable future.

Aside from financial considerations, your decision to buy or lease should be influenced by lifestyle choices and preferences. Think about you may be the sort of person that bonds with a vehicle? Do you see yourself owning the same car for more than five years? Perhaps you would rather change cars often, and move from lease to lease? To drive a car for more than fives years, it would probably pay to negotiate a deal carefully, and to buy the car.

Finally, consider carefully, your transportation requirements. How many miles or kilometres do you drive a year? How well do you generally maintain your cars? If your yearly mileage is high, for example, then you may be better off purchasing a vehicle. If you only drive 12,000 to 15,000 miles a year, or 15,000 to 20,000 kilometres, yearly, then you are a good candidate for rental. Otherwise, unless you can keep within the appointed mileage limits and maintain the car well, you might incur hefty end-of-lease costs.

Article Source: http://yourfinance.co.za