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Should you lease or buy to own a car

Should you lease or buy to own a car

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Should you lease or buy to own a car

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  1. Should You Lease or Buy-to-Own a Vehicle? Frequently Asked Questions

  2. Let's weigh the options Advantages of Leasing: • Lower monthly payments • Low or No Down Payment 3. More Car, More Often 4. Fewer Maintenance Headaches 5. Lower Up-front Cash Outlay 6. No Used-Car Hassles 7. Gap Coverage usually included

  3. Let's weigh the options: Cont... Disadvantages of Leasing: • Early Termination Cost • No Ownership Equity • Excessive Mileage Charges • Excessive Wear-and-Tear Charges

  4. Let's weigh the options: Cont... Advantages of Buy-to-Own a Car: • Pride of ownership • Buy-to-own is more economical in the long run • No penalty for driving excess mileage 4.  Increased flexibility

  5. Let's weigh the options: Cont... Disadvantages of Buy-to-Own a Car: • Higher down payment is generally required. 2. Higher monthly payments 3. Maintenance costs  4. Trade-in or selling hassles

  6. Let's do the math: • Lease a car at $500.00/month for 60 months • Total payments = $30,000. • Overtime - the car will lose value. • After the lease - Estimated market value may be $18,000 • Profits to the leasing company: $30,000 - $18,000 = $12,000 and they keep the car.

  7. Better to Buy than Lease a Car • The interest incurred when leasing a car is never disclosed because technically, you are not taking out a loan. You’re just renting the car. • But if you buy to own, once the payments are complete, the car is yours.

  8. How much Should I spend on a Car? The Rule of Thumb: • Automobiles/boats/bikes should add up to one third of your take home pay. • You should not invest in items that depreciate in value overtime.

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