With the average cost of a new vehicle rising each year, it is becoming more important to understand the options available for financing.
Because of the variety of different leasing plans available, the amount regulations on the leasing industry, and what can sometimes be a high stress situation negotiating the price for a vehicle, consumers need to be well informed so they can make the best decision for their individual situation.
Leasing is not for everyone, and your decision should take into consideration several factors. These factors include how long you like to keep your vehicle, how many miles you typically drive your vehicle each year, how much money you want to make available for an initial payment, and how you value ownership or equity of your vehicle.
The basic principle of leasing is only paying for what you use of the vehicle. The most frequently cited advantages of leasing are a lower initial cash outlay, the monthly payments can be lower than a loan, and you can usually get more vehicle for your money. Common disadvantages are not owning the vehicle at the end of the lease you, and the potential to be charged for excess miles driven and excess wear and tear on the vehicle.
The basic principle of buying your vehicle, either with cash outright or with a finance agreement, is building equity toward ownership. The main advantage is that you own the vehicle after all the payments are made. The main disadvantage is that by the time you actually own the vehicle, it may have cost you far more than the vehicle is worth.
Our goal for this guide is for you to have a better understanding of the considerations you should make when deciding to lease or buy, as well as a basic understanding of the most common terms and conditions of a lease and your rights and responsibilities as a potential lease customer.