| Let's face it, you love cars. You love to drive a new or | | | | better deal is because the payments are typically |
| late model car, the smell of a new car, the feeling of | | | | lower than if you had purchased the car. Again, as |
| new and untapped power under the hood. It is exciting. | | | | described above, this depends on the estimated resale |
| But one of the problems is that your financial | | | | value of the car after the lease period, but generally |
| resources are a bit more limited than your dreams are, | | | | speaking, your payments will be less. However, since |
| so you may want to consider a car lease instead of | | | | you are driving more of the car as an asset or |
| going out to get a car loan for a purchase. | | | | resource with less of your commitment to the vehicle, |
| The first thing you need to understand is exactly what | | | | your credit needs to typically be a bit better than it |
| is a car lease. When you lease a car, it does not mean | | | | would for a purchase or a car loan. |
| that you own the car. Rather, it is more like renting the | | | | The real beauty of a car lease is that at the end of |
| car, although there are still many very important | | | | the lease, you can just turn in the car and slide into a |
| differences. For example, you still need to pay for the | | | | new lease on a brand new car. This is assuming of |
| insurance on the car. This is critical because you need | | | | course that you have not put too many miles on your |
| to carry full coverage on the car, including collision | | | | leased car. You should have a good feeling for how |
| insurance, which serves to protect the risk of the | | | | many miles you will drive. Standard lease agreements |
| owner of the car while you have it out on lease. This | | | | state about 12,000 miles per year although that can be |
| insurance is typically more than what you might | | | | adjusted up front if you know you will drive more. Be |
| normally have if you had purchased the car outright, so | | | | very conscious of how many miles you are putting on |
| be sure to figure the cost of insurance into your overall | | | | the car, since all miles in excess of what you agreed |
| cost of driving the car. | | | | to when you turn in the car are assessed a pretty |
| One of the big bright spots with a car lease is that you | | | | hefty charge, like 30 cents per mile or even more. |
| do not worry about depreciation of the car, since you | | | | On the downside of a car lease program, you never |
| paid for that up front. You see, the cost of the lease is | | | | own the car. You have replaced tires, wiper blades, |
| figured based on how much the car will be worth in | | | | paid insurance on it, but since you are leasing the car, |
| resale value at the end of the lease. For example, if | | | | you will never own it and will therefore always have a |
| the car you want to lease cost $40,000 and at the | | | | monthly payment. Contrast that with a car purchase, |
| end of a two year lease, assuming you have put | | | | where after the car loan term, you own the car and |
| about 24,000 miles on the car, the resale value is | | | | can still drive it but you are not making car payments |
| about $25,000 then the lease payment is figured | | | | anymore. |
| based on the difference, or $15,000. This is exactly the | | | | Consider which option is right for you. A car lease can |
| reason that you can get a much better lease deal on | | | | be a great deal and keep more money in your pocket, |
| a car that has a great resale value, instead of a car | | | | as long as you can live with the restrictions and |
| that it pretty much shot after two years. | | | | limitations. |
| Another reason that a leased car can be considered a | | | | |