| the economy as it is today, people are looking for | | | | interest rate. Car expenses are reflected in the length |
| more imaginative ways to afford a vehicle. Buying | | | | you own the car. After 3 years the expense and |
| new is of course an undeniable pleasure, knowing that | | | | interest drops 30%. |
| you are the first driver, warranties, and of course that | | | | Leasing a new car- |
| new-car smell. However, we are told that new cars | | | | With the cost of new vehicles rising, leasing has |
| lose close to 40% of their value within three years | | | | become a much more viable alternative. It has several |
| after the purchase. When you buy a used car, the | | | | advantages over the purchase of a car such as low |
| previous owner absorbed this initial cost in the | | | | or no down payment, lower monthly payments and |
| depreciation cycle, thus most of the cost in owning and | | | | lower sales tax. This is a popular choice because of |
| operating the car is reduced. Other benefits to buying | | | | these points, but it also important to remember that |
| used are:no sales tax, lower depreciation, lower | | | | leases expire. Most leases have a 3-4 year contract, |
| financing costs, lower registration and licensing fees | | | | after which a new contract is required. This is costly |
| and lower insurance premiums. There are still | | | | because you will have to pay again for drive-off fees |
| downsides to buying used which you must also keep in | | | | and lease payments go up. Also, DMV taxes and |
| mind. Unwarrantied repairs are very costly, there is a | | | | insurance payments rise within the first year, |
| chance for lack of reliability, a maintenance costs are | | | | something that must be considered when leasing. |
| much higher, ie: replacing the tires, battery, brakes etc. | | | | Buying a used car: |
| Leasing a new car vs. a used car is another question | | | | Given that you bought a good reliable car from a |
| we ask ourselves. It is always best to check out the | | | | reputable dealership, the first year expenses are |
| financials on both but personally I believe that we all | | | | significantly lower. After the car has been paid in full, |
| have arrogance when buying or leasing any car. Some | | | | expenses level off. However, increase to maintenance |
| people only look at the financial aspect, while others | | | | and repairs increases exponentially each year. As you |
| are willing to pay more for a class-appropriate, fancy | | | | can expect, keeping your used car well maintained can |
| looking car. | | | | be the difference in savings. Insurance premiums are |
| For the purpose of this article we will look at these | | | | lower for a used car especially if you choose to wave |
| three options: | | | | the collision and theft coverage. |
| Owning a new car- | | | | Whether buying or leasing a new car or buying a used |
| Up until the decline of the economy, purchasing a new | | | | car research of the product and its value is the most |
| car was most preferred. However with today’s | | | | important factor. Do your homework; check the |
| standards the cost of a new car far exceeds the | | | | financials i.e. - the length of the lease of loan, plus the |
| income of most people. This lead to higher loan interest | | | | interest. Understand the conditions and terms of leasing |
| and cars were financed for 2 or 3 years paid off and | | | | and always get a mechanic to check the mechanics |
| then traded up. Now a days new car loans are longer, | | | | of any used car. These simple rules can save you |
| as long as 5 or 6 years in order to keep the monthly | | | | many frustrations in the years to come. |
| payment lower, but longer loans means a higher | | | | |