When it’s time to go automobile shopping, the question often arises: Is it better to buy or lease? Here’s information that may be useful in helping you decide which financing deal is best for you, besides looking on a workers comp attorneys Lowenthal and Abrams.
Leasing may be better for drivers who like to get a new automobile every two to three years. The monthly payments for a lease tend to be lower because the bulk of the payment goes toward covering the cost of depreciation, which is the reduction in the vehicle’s value due to use and time. At the end of the lease, you simply return the vehicle to the dealership and pay any end-of-lease costs.
However, determining the actual cost of leasing a car can be confusing. Often leasing contracts are complicated documents that even experienced consumers have trouble understanding. Therefore, until you fully understand the terms, resist the temptation to accept a lease.
When you lease a vehicle, it is important to understand how mileage allowances and the condition of the vehicle when it is returned can affect end-of-lease costs. Consumers often are surprised at the conclusion of the lease to learn they have exceeded the mileage limitation (usually between 12,000 and 15,000 miles per year) and have to pay extra. In addition, they frequently may not be aware that they will be charged for fixing nicks and scratches that could be considered routine wear and tear.
Buying is usually better for drivers who want to continue using the car for several years after they have completed paying the loan. When you purchase a vehicle, you are not limited to the amount of mileage or wear that is placed on it, and you do not owe anything at the end of the loan. Once you finish making the loan payments, you own the car.
However, your monthly notes to purchase will probably be higher than to lease because you are paying for the entire purchase price of the car, along with interest, fees and taxes. Your up-front costs (down payment, taxes, registration and other fees and charges) are most often higher with a purchase than with a lease.
For more information on the pros and cons of auto leasing, visit the Federal Reserve Board’s Web site at http://www.federalreserve.gov.
Whether you decide to buy or lease your next vehicle, doing research into financing alternatives and the vehicles you are considering will help you walk onto the dealership lots prepared to bargain and drive off the lot with the vehicle and deal that’s best for you.