Friday, January 2, 2009

Leasing vs. Buying a New Car

(Source: Radu Mamut)

Car transport is the most popular way of getting around in villages, cities, and small towns. When it comes to owning a car, many people grapple with whether, it is better to lease or to buy a car. People that do not have a great deal money or those that would rather use the money for something else can lease a car. This is because leasing a new car does not require the person to have a large amount money as some leasing companies only expect a little amount of money for the lease, while others do not expect any money at all. People that lease new cars, will be required to pay small amounts of money every month as well. All this is good enough, but at the end of the lease, the leaser will be left with no car. On the other hand, buying a car is more costly initially, as one will have to pay a tidy sum of money every month for it. The best part of it is after the payments, the car will wholly belong to the buyer and they can either keep it or sell it to buy a new one.

Leasing also helps those looking to experience an expensive car, but do not have the money to buy one. Thus, one can drive in a flashy car, without necessarily owning the car; this is possible via leasing. Monotony is a problem people that have driven the same car for years often face. This problem can be dealt with, if a person chooses to lease as they can change their car after several years. One more reason, as to why leasing a car can be the better option, is that the owner will not be subjected to trade-in hassles, when their leasing period is over, they will walk way peacefully. One important thing to note is that leasing cars is not for people that love to keep their cars for extended periods, it is for drivers whose mileage is high, or for the kind of people that do not like making decisions on new cars on a regular basis. People that are not into building equity, have stable incomes and do not like selling and trading in used cars can go for leasing.

During periods of low interest rates, it is financially sensible to buy a car rather than lease one, as one will not pay much for it. The problem of mileage penalty will not keep car owners awake, as they will not be subjected to it. Buying a car is more flexible than leasing one, because the owner can do whatever they want with it, they could sell it at their convenience and so on. People that would rather drive a car they own for years to spread the cost out, those that like customizing cars or those that expect lifestyle changes any time soon can buy the car. No one can say for sure whether leasing a car is better than buying a car and vice versa. The decision one will make will depend on their lifestyles as well as their priorities in finances and cars.

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