Question: Should I Lease a Car?
When you are ready to purchase your first car, you may be wondering if you should buy a new or used car or to lease a car. This is an important decision to make. You need to understand the terms and conditions surrounding your lease or your purchase. Generally, it is not a good idea to lease a car. In fact, it is best to buy a used car. A car depreciates in value the most rapidly in the first three years, and so it is best to purchase a car that is about three years old.
Leasing a car is a bad idea for many reasons. The first reason is at the end of the lease you have nothing to show for all the money that you spent. You either must turn the car into the dealer (where they try to convince you to trade up to a new lease) or you must purchase the car at the end of the lease. There are also hidden fees associated with leasing a car. Often the mileage limits are difficult to stay under, and you may find yourself paying over mileage charges at the end of your lease.
The way to save the most money on car is to purchase with cash. You need to be sure that you can afford any payments that you choose. Imagine what you could do with your money if you didn't have car payments to worry about. This would give you extra money to save or to have fun with. You will save money by buying a good reliable used car and by taking proper care of the car. When you purchase a used car, take it to a mechanic you trust and have it inspected so that you know you are buying a sound car.
If you can't pay with cash make sure you don't take out car payments you can't afford. Generally, you need to be able to pay off the car within three years. Your total monthly debt should be less than twenty five percent of your current income. If you stick within these parameters you will be in a much better situation financially. If you do not qualify for a car loan, you may have to buy with cash, which can limit your purchasing power. You must meet the same credit qualifications if you lease or buy. You may want to consider joining a car share while you save up cash to purchase your car.