Is leasing a car more of a viable alternative for you than buying one? For some, it is. With a lease, your monthly payment may be less than if you were buying the car outright. In 2006, nearly 18.9 percent of cars and trucks were leased. According to Power Information Network, a division of J.D. Power and Associates, that’s a rise from 2004′s 15.2 percent and 2005′s 17.5 percent. Expertsagree that the leasing trend could get even bigger as consumers are becoming more pay conscious. Interest rates are higher than they were three years ago, adding to the higher number.
Car makers know the interest is there and are doing something about it. Ford Motor *** for example, is offering vehicles at lease payments below $300 a month. Andthe new2007 Dodge Caliber SE, which has a MSRP of $14,675, can be had on a 36-month lease for $245 a month. Compare that to buying theSUV on a 36-month loan that would have a monthly payment of $438.
But industry experts are cautioning you to check the figures.Also consider what the car may be worth after a three year lease agreement is up.
First, you should determine the total cost over the life of the lease. You can figure that out by multiplying the monthly payments by the length of the lease. Then add in the down payment and any other up-front costs.
Then ask yourself what would you get if you were able to sell the car at the end of the three year lease. To figure that out, subtract the total cost of the lease from the selling price of the car. Calculate if you could sell the car at the end of the lease agreement and for how much.
If, for example, you are interested in an Acura TSX which is selling for about $28,582. A three year lease can be had for $299 a month. The total cost of the lease is $12,600. At the end of the three year leasing agreement, you ou turn it in. However, if you didn’t lease the car and you could sell it after three years, what do you think you can get? The current data shows that a three year old Acura TSX is selling for about $19,000. So leasing you spent $12,600. Buying outright, and then selling it, nabs about $19,000. What would you do? Obviously, in this case buying the car outright and then selling it is the better deal.
So consider all the options and keep an eye on the Kelley Blue Book.
Via WZZM
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