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Lease Verses Buy Car: Should I Buy or Lease a Car

Taking Over Someone's Car Lease Is Best Financial Option When Car Shopping

Despite the economy, people still want and need to shop for cars. Problem is, they are hesitant about getting into a long-term payment obligation because of all their existing bills and financial uncertainty. LeaseTrader.com, the company that facilitates car lease transfers, offers the best alternative in helping people take over someone's existing car lease. "In uncertain economic times, people turn to short-term commitments with their finances," said Sergio Stiberman, CEO and founder of LeaseTrader.com.

"With LeaseTrader.com, people can take over an existing car lease and manage their finances more clearly because they can budget their monthly car payment for a much shorter time frame." When getting a new car, you often have to pay a $2,000 down payment on average. Taking over a leased vehicle doesn't require a down payment since the previous lessee has already paid this fee. What's more, you are only taking over the remaining terms of the lease, meaning you won't be strapped into a 48-month lease contract -- the average term of a new car lease today.

"Using LeaseTrader.com is a good way to avoid paying a down payment at a dealer," said Ken Perna, a New Jersey resident and car shopper. "Also, getting a leased car with only six months remaining gives me a lot of flexibility in determining my driving needs." LeaseTrader.com has a full staff to assist people in taking over someone's lease.

Each car shopper is assigned an account representative to walk them through the transfer process. It's free to browse the site, $39 for a membership with credit verification, and $149 to take over someone's car. About LeaseTrader.com LeaseTrader.com facilitates automobile lease transfers, and easily and affordably matches car shoppers with drivers wanting out of their leased vehicle. For more information visit http://www.leasetrader.com/, or call 800-770-0207.

Find Out If A Car Lease Is Your Best Option

When most people are looking for a new car, one of the options that they think about is whether or not a car lease would be more beneficial and cost effective for them than purchasing the car. There are many schools of thought about this and many differing opinions, but what it comes down to is that there is no right or wrong answer that applies to everyone, because everyone's situation and needs are different.

When you sign on for a car lease, it means that your payments are going to reflect the amount of depreciation of the car over the term of the lease. For example, if the car you are looking at has a sticker price of $30,000 and you sign up for a one year car lease, the dealership estimates that this vehicle, after two years of use and about 24,000 miles, can be sold for say $20,000, assuming a modest dealer profit is included there as well. So your lease payments would be based on $10,000.

Granted, this is a very simplistic look at how lease payments are calculated, but this is pretty much the bottom line. Based on this, you can see that choosing a vehicle for your car lease that has a great resale value is going to keep your lease payments much lower than a car that depreciates much more quickly and does not have a good resale value.

The miles that you plan to drive the car that you put on lease is critical, since one of the major factors that influences the car's resale value will be the number of miles on the car. Most lease programs allow you about 12,000 miles per year. It is very important that you are able to come up with a very good and very accurate estimate of the number of miles you will drive the car over the lease term, since that will have a major impact on the amount of your monthly lease payment.

If your planned usage of the car is to drive more or less than the standard number of miles per year, talk to your dealer about that. If your usage can be committed at 9,000 miles per year instead of 12,000 then your lease payments will be lower because the car will have fewer miles on it at the end of the car lease term, thereby giving it a higher resale value. But if you realistically plan to put 18,000 miles a year on the car, be VERY sure to mention that also. Your lease payment will go up, but that is much better than being assessed for excess mileage at the end of the lease, where excess mileage may be charged at a rate as high as 30 cents per mile!

In a car lease, you do not own the car and will never have title to the car. In essence, you are doing a long term rental of the car. But you still need to make the payments, and you are responsible for car insurance on it. And since you do not own the car, you will need to carry full insurance coverage on the car, including collision coverage. You are also responsible for repairs to the car, including things that are not covered under warranty, as well as "consumable" things such as tires, wiper blades, oil changes, etc.

The beauty of a car lease is that at the end of the lease, you turn in the car and can walk away. You don't have the hassles of trying to sell it yourself, and can turn right around and lease a brand new car.

A car lease may be right for you but make sure you understand how a lease works and what the restrictions are so that it does not cost you more than a purchase would have!

For more insights and additional information about a New Car Lease as well as getting a free no-obligation car loan or lease quote, please visit our web site at http://www.car-loan-resources.com 

The Affordable Way to Escape Your Car Lease Contract

For many people, terminating or exiting an existing car lease is a serious headache that comes with considerable financial consequences. Life events like marriage, a new child, job transfer and income changes have all prompted consumers to look for a way out of their car lease. As a result, people are increasingly using the services of LeaseTrader.com (www.leasetrader.com), an innovative provider of automobile lease transfers that easily and affordably matches car buyers with owners wanting out of their leased vehicle.

Automobile leasing proves beneficial since it allows people to constantly drive a nicer car at a lower monthly payment compared to buying. According to market data, it is estimated that 17 million cars are leased – roughly one third of all vehicles sold. It is also estimated that approximately half of all lessees look to terminate their contracts early for a variety of reasons. Unfortunately, early termination of a car lease may cost several thousands of dollars, making it financially impossible for many to exit their lease agreements without facing hefty penalties from the leasing company or dealer.

With LeaseTrader.com, however, individuals have the power to identify and transfer their leased vehicle – without financial penalty – to a buyer interested in taking over and assuming their lease. They simply post their vehicle information on www.leasetrader.com and transfer ownership of the car and lease contract to an eligible buyer.

LeaseTrader.com also offers significant benefits to buyers. Many consumers are unable to afford quality vehicles because of large down payment requirements, rising interest rates and a long-term commitment. As a result, LeaseTrader.com lets consumers lease a short-term vehicle without the need for large down payment. Additionally, buyers can find cars with shorter lease terms instead of being financially committed to 36-, 48- or 60-month lease terms from a traditional car dealer.

“Today’s auto dealers have increasingly moved towards longer term lease contracts often making it difficult for people to fulfill their lease agreements,” said Sergio Stiberman, president and chief executive officer of LeaseTrader.com. “Our service empowers the consumer to adapt to unpredictable life events and get out of their leased vehicle. This allows them to move on and choose a vehicle that better fits their current financial and recreational needs.”

The process for using LeaserTrader.com is simple: Lease sellers and buyers register online at www.LeaseTrader.com. The seller posts information on their car, and buyers browse the listings and contact the seller if interested in assuming their leased vehicle. The original lender (leasing company) will determine whether to transfer the lease based on the buyer’s credit score and policy. The buyer and seller then proceed to coordinate logistics of the vehicle transfer. LeaseTrader.com offers price quotes for transportation services.

When Does Leasing Beat Auto Loan Financing?

Whether leasing is advantageous or not will depend on your particular financial situation, on your needs as a driver, as a tax payer and eventually as an owner. By leasing a car you agree to a series of terms that you should be well aware of before even considering undertaking a leasing contract. This is due to the fact that leasing is only advisable under the right circumstances. Otherwise, compared to auto loans leasing is far more expensive on the long run. Thus, you’d better analyze your situation carefully prior to deciding what to do.

Car Leasing Explained

When you lease, the financial institution is the proprietor of the vehicle and remains proprietor of the vehicle till the car is finally purchased. During the leasing contract you get to drive the vehicle and use it with some restrictions (according to the leasing contract). The limitations are similar to those imposed for the ones that rent vehicles and basically depend on the financial institution stipulations (for instance, there are usually certain mileage-per-month ratios).

In exchange for using the vehicle, the applicant has to pay a monthly installment that is normally just a bit higher than a rent payment. Eventually, the lease taker is entitled to purchase the vehicle and in that case, the monthly payments are considered as part of the payment. Thus, the applicant has only to make a lump payment at the end of the leasing term to keep the vehicle or else, he returns the car, renews the contract or exchanges the car for another vehicle.

Benefits of Leasing Over Auto Loans

Leasing provides several benefits that makes this financial transaction more advantageous than purchasing a car with an auto loan under the right circumstances. For instance, the payments’ amount is significantly lower than the loan installments and only a bit higher than renting.

Moreover, since the car remains property of the financial institution, there are tax benefits too. Part of the payments of your leasing contract can be deducted from your tax presentations. And last, but not means least, getting approved for leasing is far simpler than qualifying for a car loan. There are not harsh credit requirements for approval. You’ll only need to show proof of your ability to afford the monthly payments of the leasing contract.

The Right Time For a Leasing Contract

When is leasing advantageous? There is no single answer to this question. If you lack certainty in your financial life, if you don’t know what you are going to earn then next semester or year, you won’t commit to a loan for purchasing a car that you might lose due to your lack of ability to repay the loan. Leasing provides more affordable payments and you can start saving as much as you can for the final lump payment if you want to keep the car.

Also, if you are one of those that changes the car regularly, leasing might be the right solution since you don’t need to keep the car, and by the end of the leasing contract you can renew it and request a newer model.

Mary Wise, a professional consultant at www.Badcreditloanservices.com   with twenty years in the financial field, prevents consumers from falling into the hands of fraudulent lenders. In her website you will find more useful tips and interesting financial articles on this and many other related topics.

New Auto Purchase - Lease VS Buy

Essentially, Leasing is just an alternative way to finance a new vehicle. We know that when purchasing a new vehicle the down payment, sales tax and license fees are required to be paid up front. However when leasing a new vehicle you are required to pay only the first monthly payment, a security deposit (usually same as monthly payment), and the license fees. The sales tax (which is based on the capitalized value of the vehicle) is actually amortized over the term of the lease in most states. In other words, the taxes are included in the monthly payments.

Capitalized Cost
Essentially the capitalized cost of a new vehicle is the actual price you have agreed to pay for the vehicle.

Gross Capitalized Cost
The gross capitalized cost of a new vehicle includes the selling price of the vehicle (which is the capitalized cost plus acquisition fees, extended warranty, accident & health insurance, dealer title fee, payoff on your trade-in, credit life insurance, gap insurance and any other fees the dealer decides to charge you). Buyer beware; that most people really don't ever know what their capitalized cost is because it is buried within the gross capitalized cost and the dealer doesn't actually reveal this number unless he has to. Most car deals made at auto dealerships are negotiated on the basis of payment rather than price. This applies to both leasing and purchasing. Don't get caught in this trap! Make the dealer reveal the selling price for every payment offer he makes you!

Adjusted Capitalized Cost The adjusted capitalized cost of a new vehicle is the gross capitalized cost minus (-) your down payment, net trade-in amount, rebates, license fees and taxes along with any other deductions given.

Depreciation/Residual
When purchasing a new vehicle your payments are based on the full value or selling price, plus extended warranty, tax & license, minus (-) rebate, down payment and net trade-in value. However, when you lease a vehicle your payments are based only on the "depreciation or your use" of the vehicle during the entire term of the lease. The depreciation is actually only a portion of the capitalized cost of the vehicle and is determined by the term of the lease, number of miles driven and condition of the vehicle at the end of the lease. The payments on a lease are based on the deprecation money factor (which is a form of interest rate) and the amortized taxes. Therefore, you can actually drive a more expensive vehicle with a lower payment if you lease. Please note that the depreciation is actually estimated and set at the inception of the lease.

The residual is the portion or balance of the adjusted capitalized cost after the deprecation has been deducted. The residual is just put aside in limbo until the end of the lease. The higher the residual - the lower your monthly payment. At the end of the lease you have two options. You can either turn the vehicle back into the bank or leasing company, or you can buy the vehicle outright for the residual balance. You can even refinance the residual. But keep in mind if you turn in the vehicle with more mileage than allowed on your contract, you will be charged any where from .12¢ to .25¢ for each extra mile. In an auto lease you are limited to a specific number of miles in your lease contact. The average would be from 12,000 to 15,000 miles per year. You may drive any number of miles in any given year but you cannot exceed the number of allotted miles or you will be penalized. If you purchase the vehicle the charge for the extra mileage will normally be waved. Most banks and finance companies will allow you to add an extra 15,000 to 20,000 miles to your lease contract depending on the term of the lease. However, the cost of the extra miles will be added to your gross capitalization cost and your monthly payment will be increased accordingly.

Ownership
When you have entered into a lease contract you cannot terminate the lease or turn-in your vehicle prior to the ending date of the contract. If you do this the bank will report this as a voluntary repossession on your credit record. On an auto lease the vehicle is actually registered and titled to the bank or leasing company. Therefore you do not own the vehicle, the bank does. You get to use the vehicle and are legally responsible for the upkeep and maintenance. Please note, if you don't maintain the vehicle during the lease you will be penalized for all excessive wear-and-tear when you turn it in. Also, if you really needed to get out of your lease you can buy out of the lease if you can get the financing or you can get someone to take over your lease. Of course, they will have to qualify.

Vehicle Warranties
The average new car warranty is 36 months or 36000 miles, which ever comes first. It is not recommended that you enter into a 4, 5 or 6 year lease contract because they are not economical. Even with a four-year lease it is common for the residual to be higher than the actual value of the vehicle at the end of the lease which makes it very hard to refinance. If you are like a lot of people you can lease a new vehicle every 2 to 3 years and never have to buy an extended warranty. The only time it would be beneficial to buy an extended warranty is if you knew you were going to buy the vehicle outright at the end of the lease.

Gap Insurance
Gap Insurance is basically insurance coverage on the difference between the actual value of your vehicle and the balance you owe on the lease including the residual. This kind of protection is needed in case your vehicle is involved in an accident and is declared a total loss. Gap Insurance is important especially for people who lease vehicles. The lease on a vehicle is actually designed for the balance owed to be upside-down in relation to the actual value of the vehicle until approximately the end date of the lease term. At this time the residual should fall in line or be equal to the vehicle's actual value. Gap Insurance is good for purchase financing as well. The gap is not as large as in leasing, but you still stand the chance of having to put out a great deal of money.

Final Advice
Remember, there are two main factors you must consider when you are thinking about leasing an automobile. The first is how long you intend to keep the vehicle and the second is how many miles you travel annually. If you intend to keep the vehicle a maximum of three years and you only average 15,000 miles a year, then you should definitely consider leasing. If you want to keep the new vehicle for more than three years, you should consider purchasing.

When you lease a vehicle, you very rarely have to put any money down, so lease a new vehicle every two to three years and you won't owe any money on the old vehicle, plus you'll never have to buy an extended warranty. Also, you will have spent a ton of money less for each vehicle than if you had purchased them. If you want to keep a vehicle longer just buy it at the end of the lease.

Remember, don't let the dealer try to sell you on the basis of payments. Negotiate on the price only and when you have agreed on the price then tell them you have a trade-in. When you have agreed to your trade-in value then tell them you want to lease the new vehicle. Now you know what to do from here. Also, dealerships have a tendency to quote lease payments without the monthly tax. This makes a big difference in the monthly payments. If you don't control this you will be sadly surprised when you go into the finance manager to sign the paperwork. One more thing - when you are signing the lease contract, be sure to verify that the trade-in value you have agreed upon is actually deducted from the capitalized cost. Otherwise the dealer could wind up purchasing your trade for pennies and you would never know.

Brad spent thirteen years in the Automobile business, specifically auto sales and worked for several Dealerships. He held positions from Retail Salesman up through New Car Manager and Fleet Manager. During this period Brad received an excellent education on what goes on inside the Automobile Dealerships. You can visit and communicate with Brad at his website http://www.autopurchasesecrets.com

Leasing a Car Foolishly

By John Rosevear June 15, 2007

7 Recommendations

Most Fools are aware of the pitfalls of leasing a car. Your monthly payments don't build any equity, there are lots of restrictions, you may have to carry extra insurance, and extra wear and tear on the car will cost you dearly when you give it back. Clearly, for many Fools, leasing just doesn't make sense: As I pointed out a few days ago, buying a nice two- or three-year-old used car and keeping it until it's old and tired is the most cost-effective way to go for the average Fool.

But not everyone can do that. If you're a real-estate agent who regularly chauffeurs clients, for instance, a tired old car might be a significant professional liability. And, of course, if you're someone who just has to have the latest features, and you're willing to pay for them with your eyes open, leasing can be a cost-effective way to do that. In addition, many big automakers, including Ford (NYSE: F), General Motors (NYSE: GM), and Toyota Motor (NYSE: TM), offer some incentives on leasing as well as on new-car purchases.

If you're thinking of leasing, here are some considerations:

* Can you really stay under the mileage limits? Leases limit the number of miles you can put on the car in a year. These limits usually range from 12,000 to 15,000 miles, but they can be as low as 10,000, and you'll pay a hefty fee if you exceed them. Figure out how many miles you've put on your current car(s) over the last few years, and be realistic -- and leave a margin of error.

* Will you be happy keeping the car for the full term of the lease? And are you sure you'll be able to afford it? Early-termination penalties can be brutal, often costing almost as much as it would have cost you to stay the course.

* Do you treat your cars well? As with excessive mileage, "wear and tear" will cost you. If your leased beast will sleep outside under a white pine that drops sap in the summer and branches in the winter, clearly you'll want to rethink the leasing thing. But "wear and tear" can be something as simple as scuffing from rock chips or a bicycle rack. If your lifestyle includes lots of roof-mounted accessories, off-road adventures, or young kids, think carefully before leasing -- or expect to pay up at the end, and budget accordingly.

* Have you budgeted for the extra costs beyond that "low monthly payment"? Sure, when you're leasing, you generally save on the down payment -- and in some states, you may pay lower taxes than you would on a car you owned. But leasing has its own costs, beyond the monthly payment and any penalties for excessive wear and mileage. You may be charged an up-front fee to initiate the lease, and another fee at the end of the term -- even if you return the car in perfect shape. Additionally, you may be required to (or want to) carry extra insurance, which will drive up your ongoing costs. Factor these into your budget before you sign.

* Do you need to modify the vehicle in any permanent way? I'm not talking about superchargers and hood scoops -- if those are your thing, you're probably going to buy anyway. Leases generally prohibit permanent modifications of any kind, which can include everyday modifications like aftermarket stereo systems and some types of trailer hitches. Make sure anything you plan to do with your leased car is reversible, or at least allowed under the terms of your lease agreement. If it isn't, it may count as "wear and tear" and cost you a bundle at the end.

Whether the vehicle of your dreams is a new hybrid SUV, a Nissan Maxima sedan, or a sporty Honda S2000, leasing can help you save money while keeping the contents of your garage fresh -- as long as you follow the rules.

Looking for more common-sense tips that will help you make the most of your finances? Check out the Motley Fool Green Light

Smart Car Leasing for Beginners


Car leasing is extremely popular because it provides an attractive method of driving an automobile that you might not otherwise afford. It allows you to make lower monthly payments than with traditional car purchase loans. About one out of every four vehicles driven by automotive consumers in the United States are leased.

But leasing is not for everyone. You should take the time to learn about leasing, and be sure it's right for you before making a decision.

What is Leasing

While a purchase loan is a method of financing the ownership of a vehicle, leasing is a method of financing the use of a vehicle for a specified time period. As much as it sounds like renting, leasing is different.

A lease is a formal contract with a leasing provider that allows you to drive the provider's car and only pay for the portion of the vehicle's value that you use up during the time you're driving it. You agree to pay for insurance, licenses, taxes, repairs, and maintenance.

The leasing provider retains ownership and title to the vehicle throughout the lease. At lease-end you can simply return your vehicle to the provider, or you may purchase the vehicle and continue driving it.

Benefits of Leasing

Leasing offers the following benefits when compared to purchase loans:

- Lower monthly payments

- More car, more often

- Minimum or no down payment

- Smaller sales tax bite in most states

- No used-car headaches at end

Who Provides Leases

Contrary to popular belief, car dealers do not lease cars. Banks, credit unions, and financial divisions of major car manufacturers lease cars. Dealers simply act as agents of a leasing provider, such as Ford Motor Credit or GMAC, to arrange the lease on your behalf. Dealers typically work with more than one provider.

Once you've picked out the car you want, the dealer sells it to the leasing provider, who leases it you. It's not necessary, nor is it always the best choice, to use the "captive" leasing company chosen for you by the dealer.

You can arrange for lease financing yourself with an independent leasing company, bank, or credit union after you've negotiated price with a dealer. Some lease providers even work with dealers to acquire vehicles for you at reduced prices, saving you money and the stress of negotiation.

Who Should Lease

Leasing makes sense for many automotive consumers, but not for others. Here's how to determine if you are a good leasing candidate:

- Are you willing to trade ownership of your vehicle for lower monthly payments? Leasing is a great way to lower your payments or drive a better car for your money, but you must be comfortable with having no ownership of your vehicle, unless you purchase at lease-end.

- Can you stick with your lease until the end? Leases require you to commit to driving your vehicle for a specific number of months — typically 24, 36, 48, or 60 months. If you feel your lifestyle, your finances, or simply your taste in cars may change significantly in future months, you may not be a good lease candidate. To end a lease early is usually troublesome and costly.

- Do you drive more than 15,000 miles annually? If your answer is yes, you may not be a good candidate because lease contracts are typically written with an annual mileage limit, typically 10,000-15,000 miles. If you drive more that the specified number of miles you will pay a fee for every mile over the limit.

- Do you typically keep your vehicles in good condition and change vehicles every few years? If so, you may be right for leasing. Lease providers require you to keep their vehicle maintained and repaired, with no more than normal wear and tear. If you don't, you'll be charged at the end of your lease.

- How is your credit rating? If you have a history of paying your bills on time and don't have excessive debt, you are a good lease candidate. Otherwise, you may be required to make a large down payment and pay higher finance charges or, worse, be refused the opportunity to lease.

Shopping for a Lease

The most important element of a good lease deal is the price of the vehicle. Regardless of whether you buy or lease, you should always get the best possible price first. When leasing, this price becomes the capital cost, or "cap cost." Prior loan balances and fees may be added. Rebates, discounts, down payments, and trade-in credit are subtracted. The lower the capital cost, the lower your monthly payment. This is the only element of a lease deal that a dealer directly controls.

The remaining elements of a lease — money factor, residual value, and related fees — are controlled by the lease provider and are not negotiable.

Since a lease is simply another form of financing, interest charges apply. These interest charges are known as "money factor." Money factor is expressed as a very small number such as .00375, which is equivalent to 9% annual interest rate. Again, a small money factor results in lower monthly lease payments.

Residual value is an estimate of a vehicle's wholesale value at the end of a lease term. The longer the lease, the smaller the residual value. Your lease payment is primarily determined by the difference between cap cost and residual value, which is the amount that the value of the vehicle depreciates during the lease. The higher the residual value, the lower the lease cost.

Sales tax may also be included in your monthly payment, depending on the state you live in.

You can easily calculate car lease payments, once you know the key factors, using this Lease Calculator by LeaseGuide.com.

Leasing Fees

There may be certain fees associated with your lease. The fees that lease providers charge vary both in kind and amount. One of the most common is an "acquisition fee", which is an administrative charge for the work in initiating a lease. Another common fee is a disposition fee, usually charged at the end of your lease when you return your vehicle.

You may also be charged at the end of your lease for excessive mileage, damages, and unusual wear-and-tear.

At the beginning of your lease, you will be asked to pay the first month's payment, a security deposit, a down payment, if any, and applicable miscellaneous fees associated with licensing a vehicle in your state. You will also be asked to show proof of insurance.

Driving Your Leased Vehicle

Your vehicle must be driven and cared for according to the terms specified in your lease contract. Generally, this means keeping the vehicle in good condition, using it for lawful purposes, maintaining insurance, and allowing it to be driven only by licensed drivers.

Al Hearn is founder, owner, and operator of LeaseGuide.com

Car Buying Verses Car Leasing

When it is time to shop for a new car there are many things to take into consideration. One of the biggest decisions is whether you should choose car leasing or car buying. There are many fundamental differences between the two.

To help make your decision easier the following is a list of those differences:

- At the end of the car loan term you will own a car if you opted to buy. At the end of the car lease term you return the car to the dealer and are left with nothing.

- A car loan term is usually four to six years. A car lease term is typically two to four years.

- Monthly car loan payments are generally higher than car leasing payments. This is because you are only really only paying for the car’s depreciation during the car lease term plus interest, taxes and service fees.

- Most car leases limit the amount of mileage you can put on the vehicle. If you plan on traveling a great deal you will have to consider negotiating a higher mileage limit. This will mean slightly higher monthly payments. If you exceed the limit you will be required to pay a charge of between 10 to 15 cents per mile. If you choose to buy the vehicle this is not an issue.

- When leasing a car there are limits to the amount of wear you can cause to the vehicle. Excessive wear will result in extra charges. If you buy you can do what ever you want to your car.

- If you terminate a car lease before the term is over there usually is a charge. In the case of car buying if you buy out the remainder before the car loan term is up you are usually charged a fee as well.

- The up front costs of car leasing include first month’s auto lease payments, a refundable deposit, a capitalized cost reduction( similar to a down payment), taxes and service fees. The up front costs of car buying include a down payment, taxes, registration and other service fees.

- At the end of the car lease term you have to pay any charges for excess wear and mileage then you can either walk away or buy out the car. When you reach the end of the car loan term you have no further payments and you walk away with your car.

Consider all these differences before coming to a decision on whether to buy or lease your next vehicle. Your choice will effect quite a lot over the loan or lease term including your monthly auto loan payments as well as what you can do to your vehicle to a certain extent. If you know what your long term goals are it will allow you to select the right option for your next car.

Sean Patrick develops methods to help consumers succeed in their quest for a new car. Find out more about how to shop for your new vehicle at http://www.findacarlive.com

The Many Benefits Of Leasing A Car

When you lease you do not pay for the whole value of the car, you actually pay only for the part of the car value that depreciates throughout the leasing term plus the finance charge that is what the leasing company earns for the transaction and that can be assimilated to the interests charged on an auto loan. This implies that if you don’t want to keep the car and you like upgrading your wheels every now and then, leasing might be the solution for you.

Chance To Purchase the Car

When leasing you have always the opportunity (by the end of the leasing term) to purchase the car. In that case, the payments you made that would otherwise seem like car rent payments, will be considered as part of the purchase price of the vehicle and so, you’ll only have to put down a smaller amount than the market price of the vehicle at the time of purchase (bear in mind that it is a used car by then).

Huge Savings

All this process implies huge savings on several levels. Though it may be more expensive than an auto loan on the long run, in short term analysis, you’ll be paying less on a monthly basis. The amount of the monthly payments on an auto loan are significantly higher than the leasing installments because you are paying a quota of the purchase price of the vehicle plus interests while with leasing you only pay for the depreciation of the car value plus the revenue of the financial institution.

Also, there are tax benefits to consider. The car isn’t your property and thus you won’t be paying for the whole price of the car when it comes to the sales tax. Besides, if you use the vehicle for your business, you’ll be able to deduct certain costs from your taxes too. You’ll need to contact your accountant in order to analyze this thoroughly but at a first glance, there are important tax benefits to consider when leasing.

Better Vehicle and Cheaper Maintenance

Given that the amount of your monthly payments will be significantly lower, you might be able to afford a higher price car and consequently a better one. But, more importantly, since leasing contracts only last for a couple of years and the cars are almost always new, you won’t have high costs on maintenance because newer cars tend to break down less often than older vehicles. Besides, if the car is defective you can always request it to be replaced as leasing contract terms require that you are provided with a flawless vehicle.