Should you lease or buy to own a car

Should you lease or buy to own a car

Transcript

1. Should You Lease or Buy-to-Own a Vehicle? Frequently Asked Questions
3. Let's weigh the options Advantages of Leasing: 1. Lower monthly payments 2. 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
4. Let's weigh the options: Cont... Disadvantages of Leasing: 1. Early Termination Cost 2. No Ownership Equity 3. Excessive Mileage Charges 4. Excessive Wear-and-Tear Charges
5. Let's weigh the options: Cont... Advantages of Buy-to-Own a Car: 1. Pride of ownership 2. Buy-to-own is more economical in the long run 3. No penalty for driving excess mileage 4. Increased flexibility
6. Let's weigh the options: Cont... Disadvantages of Buy-to-Own a Car: 1. Higher down payment is generally required. 2. Higher monthly payments 3. Maintenance costs 4. Trade-in or selling hassles
7. Let's do the math: 1. Lease a car at $500.00/month for 60 months 2. Total payments = $30,000. 3. Overtime - the car will lose value. 4. After the lease - Estimated market value may be $18,000 5. Profits to the leasing company: $30,000 - $18,000 = $12,000 and they keep the car.
8. 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.
9. 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.