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Why You Should Consider Leasing A Vehicle

Nov 3, 2007
Is your current vehicle paid off, do you plan to pay it off, have you ever paid a vehicle off? If you answered 'no' to these questions, you may be able to save a lot of money or drive a very upscale vehicle, if not both, by leasing.

Sure, leasing a vehicle is oftentimes made to sound very difficult, and many consumers consider leasing a complete rip off, but, in reality, leasing may be very advantageous for some car buyers and is simply another way to finance a vehicle.

The only fundamental difference between buying and leasing is that when you buy a car, you finance the entire price, but when you lease, you finance a part of the vehicle's price for a specific time period (usually 36 months).

Things that prevent many people from considering a lease are objections like, 'but after lease is over, you have nothing' and 'I'll get penalized for extra miles or damage to the car." Unfortunately, most people owe more than their vehicle is worth, which is worse than nothing, and regardless of how you finance a vehicle, excessive miles and wear will be penalized through lease penalties or trade allowance.

Unlike buying, leasing vehicles can actually give you more flexibility and shield you from changes in the market because at the end of the lease you can buy the vehicle or walk away from it. This means that if a vehicle is worth more than predicted, you can come out ahead by buying it after the lease, but this is not always the case.

It is a well accepted fact that automobiles are a depreciating commodity, but many people do not realize that they are subject to supply and demand just like anything else.

Consider this scenario: two people get the same SUV, but one buys and the other leases. During the next three years, gas prices jump to $5/gallon. That SUV will be a very undesirable vehicle, which will lower the resale price. For the person in a lease, they simply dump the vehicle, while the person who bought the SUV may be so upside down on their loan that they cannot trade without several thousand dollars down.

Just like buying a car, you can trade vehicles when you lease and you can negotiate the price. Many of the advertised lease specials are able to provide low lease payments by using the invoice price as the actual sale price, but you do not need a lease special to get invoice pricing.

If you are someone who trades often and does not pay vehicles off, you cannot afford not to consider a lease next time you trade. Do some research on what determines a lease payment, available options to fit your driving habits (like extra miles or wear/tear coverage), and what a lease payment would be on the vehicles you like. After you see what your payment is, or what kind of vehicles you can afford for your current payment, you may find your self wondering why you never leased before.
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