Auto Leasing

Leasing a new car can be tricky business. Often, buyers are enticed by the low monthly price of auto leasing, but leasing is not always the best choice. Experts concur that leasing is a fantastic idea in the event that you often change cars every 2 years and want to drive brand new cars. By leasing a vehicle, you just need to worry about monthly payments and mileage limitations -- not about trade-in worth or selling your car privately.

The benefits of car leasing become evident for the majority of people who have purchased several new automobiles in a comparatively short time period. Paying those high monthly payments can look like a waste of your finances, and of course the depreciation hit you have problems with trade-in. Most people who do trade their cars in every 2 years or so tend to find a car as a monthly cost instead of an advantage anyway, so for them it makes sense to pay less or get more car for the same amount each month.

On the other hand, car leasing isn't the best idea for people who typically maintain their car for 2 or more decades. The largest problem with automobile leasing is that it appeals to people who can afford it least. Let us look at an example. Say you bought a new car in a monthly payment of $400 a month for five decades. Assume that the car will stay in good working order for around ten years. That's a total price of $24,000 over ten years, or $200 a month. Let us assume that the car retained 15% of its initial value once it gets traded in after 10 years of service and subtract the remaining $3,600 of value from the complete price. That brings the average monthly cost to approximately $170 a month. Evidently, a rental cost of $250 a month could not be a deal, especially considering the fact that car prices go up and your payments will likely increase with each new rental.