Vehicle Leases And How To Decide If They Are Financially Helpful

By William Grant

Drivers do not always understand vehicle leases as it applies to the individual. Formerly, leasing was reserved for deep pocket corporations and rarely did the average person even consider this type of contract. However, the shorter term lease has some outstanding benefits for certain types of motorists.

Drivers who may benefit from choosing leasing over purchasing are those whose yearly mileage is low to moderate, because payments are based upon vehicle depreciation over the contract term. Drivers who regularly trade in their vehicles before accruing significant equity may also find leasing beneficial. Motorists who are concerned about high repair bills and breakdowns with older model cars also may choose a lease contract.

Alternatively, motorists who may not benefit at all from a lease agreement, are those whose financial situation is uncertain. Those drivers who put a large number of miles on their transportation per year will normally pay higher monthly rates with a leased auto. Automobile owners who keep their transportation for as many years as possible before trading it in may not benefit from this financing option.

Some contracts require a signing amount, which is similar to a down payment. When assessing the contract it is best to include the signing amount in the total cost to decide if this is a good deal. If the driver decides to buy the vehicle at the end of the contract, the overall cost for the auto will usually be higher than if it had been purchased outright.

Motorists who keep their transportation no longer than four years may discover that leasing is financially beneficial. Included in the contract are financing charges and sales tax, these should be compared against the same figures when financing the auto traditionally. The overall cost of leasing an auto over three years is normally around thousand dollars less than purchasing the auto.

Every car owner has a different idea of what constitutes a bargain for them. The motorist who retains their car until it simply will not run anymore probably would not consider a contract to lease a bargain. The individual who is concerned with having an up to date car and avoiding high repair bills may discover vehicle leases are the perfect choice for their situation.

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