Continuation from the Why Lease? Part 1
My opinion with getting cars is as follows. For your first car, buy a used one. Don’t spend too much, but don’t be cheap about it either. The first car is when you learn how to care for a car, so it should last you a couple of years. Plus, insurance is generally cheaper on a used car.
At this point you’re, past the first car and want to move forward with a better car. Your income has improved since you’ve been in college, and can afford to spend more a car. You’re done with second-hand cars at the moment. The new car feel, breaking into a car, being the first to drive a car, etc. you are craving those feelings.
A decision was made to get a new car. Now the question is either Lease or Finance?
I usually prefer and recommend leasing over financing. Coming from Brooklyn, most people from my community can’t live with one car for too long and may easily get bored of their car after a year, sometimes even four months. Leasing a car is short term. If you get bored of your car, hang in there, the lease will be over sooner than you think.
What are the costs that are involved when it comes to leasing a car? The down payment, which consists of your first-month payment, bank fees, and registration fees. The down payment can be capped into your monthly payments, but you’ll be paying a bit more per month. Then you have the monthly payment, which adds up to part of the value of the car, depending on the car. It’s due the first day of your lease, and every 30 days afterward, until the end of the lease term.
When leasing a car, you usually don’t need to worry about maintenance and caring for the car. Besides for the occasional “oil change” or flat tire. Unless you damage either the engine, body or any other part of the car.
But, along with every good thing, there is some con to it as well. You are limited to the use of miles. If there is wear and tear damage on the car, you will be billed for each scratch, and dent on the car. But, most leasing companies offer a “damage waiver”. It’s like an insurance plan that you purchase for a small sum, and will cover a specific amount towards the damages that occur throughout the lease. There are many purchase options regarding the waiver.
Financing a car is very similar to leasing a car. When financing, instead of paying part of the value of the car, like leasing, you pay the full value of the car, but have a longer term. You have a down payment as well, which consists of the same things as the down payment when leasing. The monthly payments may be a bit more, depending on how much you down up front, and the length of the term. But after everything is said and done, once the last payment is made, the car is yours and you can do with it how you please.
You may think, “Why not finance? Although I’m paying more, I own the car. I don’t have to worry about the mileage, the dents, and scratches at the end of a lease.” Yes, that may be true. But, you don’t want to finance any car. The reason for that is, not every car will last too long, and may not even make it through the term of the finance. Some cars, after three years they begin to fall apart. You want to make sure that you’re financing a car that will last a couple of years so it should be worth to owning. Every car is built to last, but the question is, Will it last?
In conclusion, I find it easier to lease. I enjoy having a new car every couple of years. I don’t know much about maintaining a car. The limited miles doesn’t affect me, I use my cars locally. If I do think I might have an issue with the limited use of miles, there is an option to purchase more at the beginning of the lease.
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