When you?re ready to get a new vehicle, one of the first things you must decide is whether to lease or buy. The advantages of vehicle leasing far outweigh buying outright. First, you must understand the difference between buying and leasing.
Buying
If you choose to buy, you end up paying for the entire cost of the vehicle, irrespective of your mileage accumulation or the length of time you own the vehicle. Most people make a down payment for a vehicle, pay sales tax, and make a monthly payment through car finance that?s largely determined by their credit score. You make your first payment about a month after you purchase the vehicle and repay the loan over a period of years.
Leasing
If you lease, you pay only a portion of the vehicle?s cost. That?s the part you use during the time you?re driving it. Contrary to popular opinion, leasing is different from renting. You don?t always make a down payment when leasing a vehicle, and you pay sales tax on your monthly lease payments. The monthly payments are based on a monetary factor that?s similar to interest on a loan.
With vehicle leasing, you may also have to pay a security deposit. You?ll make the first monthly payment when you sign the contract. When the lease term expires, you can return the vehicle or purchase it for its depreciated resale value.
So Why Not Lease?
Don?t just look at the financial comparisons when deciding whether to lease or buy. Consider your own personal priorities. With vehicle leasing, you get to have a new vehicle every two or three years. And you won?t be responsible for major repairs if you choose to lease. Most importantly, consider what type of investment you want to make.
For example, if you purchase a vehicle with a traditional loan, it?s basically like putting money into a savings account that declines in value ? you?ll never get out as much as you paid in. That?s because part of every monthly payment goes to cover depreciation and finance charges. So, when the loan is repaid, all you have to show of the investment is what?s left after depreciation and interest are deducted from the total amount you?ve paid over the years. It won?t be much, and no one would consider that a good investment.
Moreover, vehicle leasing only asks you to pay for what you use. Sure, you won?t own anything at the end of the lease term. If you choose to buy a vehicle rather than lease, you won?t own much at the end of the loan, because the vehicle has depreciated so much by then. Additionally, with leasing, your monthly payment will likely be lower than a traditional monthly car note. The savings you realize each month can be invested into a financial product like mutual funds or stocks that will actually increase in value over time.
When you?re in the market for a branded vehicle, you should consider leasing as the best option because you?ll get a new car every couple of years, you won?t be responsible for major repairs and it?s simply a good investment. You won?t own the vehicle, but branded vehicle leasing is definitely an excellent way to ensure you don?t get stuck with a car whose value has depreciated so much that it?s basically worthless.
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About the Author:
Vincent Hill is a Marketing Executive at Firstvehicleleasing.co.uk. First Vehicle Leasing provides best vehicle leasing solutions throughout the United Kingdom.
Source: http://www.informationgateway.org/branded-vehicle-leasing-practical-excellent-life/
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