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The big Question is Loans versus Leases?
Lets take a look to see
Loans enable people to buy things and a lease is a rental agreement. After making all the payments on loan, you will actually own your car whereas, when all the payments are made on a lease, you own nothing. We suggest using a loan payment calculator or formula so you know exactly what the payment would be if you decided to go down the finance route to purchase your vehicle instead of leasing it. You will see how changes in purchase price, rates, term and initial down payment will effect your loan payments. These same factors will effect your leasing payments as well.
Is leasing for you?
Leasing started of as an economical way to provide vehicles for business users. Now it's also a way for private individuals to drive a car more than they can afford to buy. Most of the new Lexus, Mercedes Benz and BMW vehicles on the road are leased. For small business owners who use there vehicle exclusively for business leasing is a good idea. However, if you can't deduct lease payments from your taxes, then I can't recommend it.
On the other hand new car garages will tell you that a lease is good for people who want to drive a new car all the time. Leasing also appeals when people want lower monthly payments and want to drive something they can't otherwise afford.
The Hidden Costs
Most leasing contract outlines the condition a vehicle must be returned in. All damage, dents, scratches and scrapes must be repaired by a professional; also all internal damage like Cigarette burns, damaged seats and trim must be repaired, the tyres must all have roughly the same tread. If you do not see to all the problems before you return the car the leasing company will you full list price for any repairs or replacements needed before terminating the contract, in some cases people would never repair these items before a sale if you owned the car.
Ending a contract early!
Garages may tell you it's easy to end the lease before your contract expires, but don't believe them. A leasing contract is difficult and expensive to terminate early. Your credit might be ruined and most leasing companies we sued you for breach of contract if you don't pay the all the penalties which were in the agreement. Never think about leasing a car unless you can keep a vehicle for the entire contract term.
Save thousands by leasing a used car!
The majority of car depreciation occurs during the first 18 months, used car leasing makes more sense pond for pound. You will save thousands because the lease payments are based directly on the amount of depreciation that occurs during the term of the contract. Nearly 15% of all car leasing is done in the used car market. But always shop around and compare new with old as some dealers may be giving discounts on the model of car you are looking to drive.
Before you sign on the dotted line
Always read the lease contract twice If you're unsure of any terms or legal language make sure ask your solicitor to review the contracts with you and don't get your legal advice from a car salesperson. Make sure you review all the current rates, terms, and monthly payments before signing and Make sure the terms and monthly payment match what is on your lease contract says. Check for hidden charges contained in the contract that have not been discussed. Find out if there are any early termination fees and get the dealer to show you them in writing. By law the dealer must show you all of his calculations, If he won't, then maybe you are being conned so you should leave the garage with haste.
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