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Review Of Auto Leasing - Scam Or Viable Option?
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Review Of Auto Leasing  -  Scam Or Viable Option?

As the price of a new vehicle continues to rise, more and more consumers are turning to a leasing finance option in order to drive the car they desire. When you agree to leasing terms you are agreeing to pay the estimated depreciation cost of the vehicle incured during your lease term instead of the entire purchase price. There are pros and cons to car leasing. I recommend really going over the positive and negatives before making your final decision.

Let's first review the pros:

1. A lease costs less than an outright purchase.

2. Leasing allows the consumer to drive away in a higher class car for the same monthly payment (coincides with number one).

3. No down payment required.

4. No need to sell the vehicle once you have completed the terms of your lease.

5. Leasing allows you to drive a new car every three years for the same monthly payment. Great for those who get sick of driving the same car after a few years.

Now for the cons:

1. You don't actually own a thing ( even though you paid taxes at the beginning of the lease).

2. You need to return the car as well as you found it ( minor wear is expected).

3. You maybe hit with over mileage fees once you return the car which can really add up

4. Must always have collision coverage. Since you will never own the car, full insurance coverage is required.

What should you do?

First, make sure there are no surprises on your credit report. Second, get approved for a car loan to confirm what your monthly payment would be if you decided to go with a conventional purchase option and to have the ability to make the lease vs.buy comparison. Once you have given your decison ample consideration and you still decide to go with a lease there are a few things you will need to know.

Capitalized cost.This is the leasing equivalent of the sales price. This is the number that you must negotiate!! The other is the money factor. The money factor is similar to the interest rate. Be sure you do all your homework just as you would if you were buying a car. Also be sure to know the terms of the lease such as the per mileage fees.

Final take away. If you are one of "those people" who need a new car every few years leasing is a viable option. If you are a loyal consumer who enjoys the benefit of driving a car way past the final loan payment to save on transportation expense and driving a later model car does not bother you, then buying a car outright maybe your best option especially considering the current great rates on car loans for those with good. or poor credit


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