Finance or Lease – What’s The Best Choice In Buying Your New Car? Part 2

As you have seen in in my first blog, I talked about the finance option and what it does for you in your purchase decision. Now I will briefly talk about leasing your new automobile, it’s real simple to get the idea. Let’s see if it’s for you.

Topic #2~Lease~Believe it or not, leasing has been around for many years. Unfortunately, most of us that have once leased, have taken the bitter pill and have written off the idea for a lease for future purchases. Back in the hay day, leases were brutal. When the term was over, we were stuck with having to pay the balloon payment or residual. This was known as the dastardly open ended lease. And aside from all that mess, we might of had to pay for wear and tear on the tires, paint, fabric and so on. It all came out of no where and it made us feel like tackling the bank manager into the grass pit. It’s no wonder, leases have been met with such criticism as of late.

Today, there is no such thing as that open lease, which brought much needed aire to those lease faithfuls. There is no such thing as an interest rate, it’s more or less called a money factor. You would only literally pay for the time that you do own the car. And you would only pay sales tax on the payment, not on the whole amount of the purchase price of the car. Whew…what a relief, right? It makes getting into a newer body style/model that much easier, you wouldn’t need to keep investing the cash to pay for a five year old car or maintain it much less.

What other great stuff should you know. A lease allows you to get a much nicer/expensive car for less payment. Additionally, the lease keeps more of your hard earned money in the bank, less you have to put down when you buy. There is a mileage restriction however, but you can easily get a 20,000 miles a year lease, which is more than suitable for most. Secondly, you can usually lease in terms of 2, 3, 4, 5 years to change the payment. In conclusion, a lease is very much a flexible payment plan, eliminates some of the hassles of negotiating rate and price of the car.

So what’s the negative, well it’s not that bad. At the end of the lease, you have a number of options available to you. Just try not to trade your car in six months after you buy it. You can give the keys back, trade in your car, or simply just sell it. You’re not obligated to any negative equity on a lease when your term is up. Just make sure that the tires in good shape, there’s no dents bigger than a silver dollar, and no crack in the windshield. As you can see, a lease is very easy to jump into without too many pitfalls. And it allows you to get the best new models every couple years.

Well I hope you took a couple of important things away from this comparison. If you missed out on the finance portion here’s that link to my other blog: []

Shaun Davidson is an Automotive and Finance Consultant in the San F

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