Will Your Hired Van Have A Mileage Restriction During Your Contract?

By Brittney Mai Lott

Car or van leasing differs from buying in that the leasing is short term lasting for about two to four years while the buying is long term with a payment period of between five to six years. Leasing may be a good idea for individuals who want the convenience of having a car around but want to keep the monthly car payments low.

For individuals who love the smell of a new car and having the option to change that every couple of years, car leasing may be the perfect idea. Of course leasing a car every year may not be allowed by the dealer and in this case buying would do the trick. With leasing, the individual can kiss the car goodbye when it starts showing wear and tear but with owning the vehicle, the individual builds equity.

Before choosing to lease or buy, one should study how much driving they do. The odometer is the perfect equipment to tell an individual how much driving they have been doing. If one drives for long distances and accumulates lots of miles, then buying may be the best option for them as leasing puts a cap on the amount of mileage one may use. Anything over the limit and the dealer charges fees which may run high.

Uncle Sam may be more good for an individual that leases than one who buys. This is because deducting the depreciation and financing costs may be allowed under the leasing system. Some luxury cars are however exempt from this tax advantage.

Dealers expect to put up the vehicle for leasing or selling it after the end of the leasing period o it is important for the lessee to maintain the vehicle well and in a good condition otherwise the dealer will charge hefty fees and ruin the individual's credit if they don't pay the money. Leasing vehicles instead of buying them gives the individual zero costs in repair as the cars are usually new and they can maintain them well enough to get another lease consisting of a new car at the end of the period.

If one is not sure which direction their life is headed, then they should buy because canceling out a lease agreement can be very costly. The low monthly payments paid out on a lease would seem like a dream compared to the hefty fees that the dealer would impose on canceling out the lease agreement. Its better to buy at this point until one is sure of what they want to do.

If one has kids and likes to move around a lot, leasing may not be the best option as kids, dogs, furniture and the normal wear and tear will leave the car messy and old. The dealer would charge for fixing it up so the best option would be to buy. If one wants to build equity that they can give to their friends or loved ones then they must maintain the car so as to increase its resale value.

Car lease payments consists of depreciation and finance charges. The depreciation cost compensates the dealer for the vehicles value that was used by the lessee. The finance charge on the other hand is the interest that accumulated due to the time value of money. In essence, the individual pays for the cost the dealer owes the the location where they purchased the vehicle.

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