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Should You Lease Your Next Car? The Pros and Cons

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On: Wed, May 29, 2013 at 1:36PM | By: Bill Wilson


Should You Lease Your Next Car?  The Pros and Cons

It’s no secret that new cars are getting more expensive all the time, and, in today’s cash-strapped economy, consumers have tighter budgets than ever. One way many drivers try to avoid sticker shock is by leasing a vehicle. But does this actually save money as opposed to buying? And are the restrictions dealers place on leased vehicles outweighed by the advantages?  Here’s a look at the pros and cons of leasing.

Pros
• Low down payment: Compared to financing a new car or truck, leasing a vehicle can save the buyer big when it comes to putting cash down up-front. In many cases, the down payment can be waived altogether. For those with solid credit but limited funds, this can be a great benefit to leasing.

• Low monthly payments: The potential savings depends on the amount of the down payment (if any) and how long the contract period lasts. Still, in many cases, a lease can cost less out of pocket each month.

• No hassles getting rid of the vehicle: As long as the leased vehicle is maintained properly, it can be turned into the dealership at the end of contract term, no hassles and no questions asked.

• Tax savings: For those who use their vehicles for business purposes, leasing allows them to deduct part or all of the cost of leasing from their debt to Uncle Sam.

Cons
• No ownership: Many people who finance vehicles are able to pay them off early enough to drive payment-free for several years. On the other hand, those who lease will be making monthly payments for as long as they need a car.

• Penalties: Those who choose to end their lease early, for any reason, may be hit with big penalties for doing so. The cost can total much as six months’ worth of payments.

• Mileage limitations: Lease contracts usually specify a limit on the number of miles that the driver put on the vehicle. If the lease exceeds this amount, then the driver may pay hefty per-mile fees.

The Bottom Line
Leasing often makes sense for those who want to always be in a newer car, who use their vehicle for business-related purposes, and who are able and willing to make monthly payments over the long-term. On the other hand, those who put a lot of miles on their vehicle, who would like to go for extended periods without monthly payments, or who can afford a good-sized down payment may be better off using conventional financing. The best course of action is to size up your situation and do what makes the most sense in your case. Either way, we wish you many years of happy and safe driving.




Comments

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alirazamalik789 | 6:20AM (Fri, Oct 4, 2013)

Domani Motor Cars is happy to present this 1988 Ferrari Testarossa! Finished in Rosso Corsa over Tan leather, the Testarossa has been given the full treatment with a custom interior. The Testarossa is HUGE piece of Ferrari history. The Testarossa is the epitome of an exotic car.


reply

alirazamalik789 | 6:31AM (Fri, Oct 4, 2013)

Well Corolla and City owners are just throwing bricks on each other. Both Corolla and Honda are good cars so please give honest reviews.
I own both GLi 2012 and Honda City Prosmatic (October 2012 model). So heres my experience about HONDA CITY.



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