Determine if you should lease or purchase your next set of wheels.
If you’re in the market for a new car, there are a lot of options to consider. Should you get a hatchback? How about an SUV? What about the make, model, color? Are there enough safety features? Everything down to the littlest detail can seem like a tough decision. Then, you must choose whether to lease or buy the vehicle.
As this is quite a significant financial decision to make, it’s imperative to look at all of your options as well as considering your financial future.
Here’s what to consider before signing the lease or purchase agreement:
For those with a tighter budget, leasing may be more favorable. Leasing a car often has a lower monthly payment compared to financing a car with the same loan terms, since with a lease you’re paying for the depreciation of the car during the years you have it.
Down Payment and Initial Fees
Most lease agreements have low down payments or you can get the dealer to waive the down payment, and you’ll pay less for the sales tax on a lease as well.
If you drive over the average commuters’ annual miles, you may have trouble finding a suitable lease agreement. You may be able to pay extra for each mile, but this certainly increases your monthly outgoing. In addition, if you go over your lease mileage agreement, you may get a penalty fee. Those who drive a lot of miles annually, opt to purchase a car.
If Driving Is Your Business
Should you drive for a living, mention this to your car dealer. They will be able to find you the right car (especially one with good mileage). When you lease, a portion of the car’s depreciation and financing costs can be deducted from your taxes. Interest on loans to buy a car, however, aren’t deductible.
Longevity of the Vehicle
Buying a car is a better deal, financially. While you do face higher monthly payments, you’ll get to keep the car, even after a traditional lease agreement is up.
Whether you lease or buy, maintaining quality auto insurance means that your financial investment is protected over every hurdle. Secure your policy by contacting Young Insurance in Burbank, California today.