When it comes to leasing a car, your best bet is to lease a new one. Though it may cost more, it is a more practical decision. The primary consideration when you buy or lease a car should not be money - it should be the use that you can derive from it. A car fresh from the factory, generally gives you the assurance that all parts are in proper working condition. There is also a warranty that supports the car for a number of years - hopefully through the leasing period that will cover all major repair costs. Leasing a new car does not require much financial expertise. You do want to be aware enough to haggle for the lowest possible deal so that the monthly payments will be lower. Depreciation is calculated on the estimated residual price of the vehicle when the lease period terminates. The difference has to be paid by the lessee. Once the price is settled, then papers are filled out and sent for approval. The deal is affected greatly by how good your credit is. Students and first-time lessees find it difficult to get a lease. Monthly payments depend on a term called the money factor. This is a small decimal number, which when multiplied by 2400, gives the interest to be paid each month. An ideal deal is one in which the interest on a lease comes out to be the same as the interest on a normal loan. While leasing a new car, it is important to remember that payments made every month will be significantly higher than for used cars. Depreciation is very high in the first year of purchase and is cut in half each successive year. That means for a short-term lease on a new car, the payment would be high. Add to that sales taxes, and you are paying a major bill each month for your car. The satisfaction of leasing a new car is you are driving a new automobile with new technology. The car will also have a higher resale value at the end of the term should you decide to sell the car or trade it in for a new lease. New cars are easier to maintain and consume less fuel. |
