Leasing or purchasing What suits my needs best?
The question on how to finance a new vehicle is a complex set of projections that only the owner of the vehicle can predict. Some considerations to keep in mind are: 1. How long do I want to keep this car? 2. Will my needs change over the next four years due to marriage, children, job change, etc.? 3. How long did I keep my last car? 4. How many miles do I drive per year? Will this change over next four years? 5. Do I modify my car or just leave it stock? (Wheels, lift kits, even window tint may determine your preference.) 6. What payment can I afford? Include insurance and gas in this equation. 7. Do I qualify for low interest loans? 8. Does my current car have equity? Should I use it toward a lease or purchase? 9. What technological changes are on the near horizon? Hybrid, diesel, hydrogen, electric? 6
2012 New Car Guide by Bakersfield Life
These are just a few of the questions you should answer before you decide to purchase or lease. The difference between the two finance methods is minimal until the end of the lease, and then your options are to turn in the car in average condition with all original equipment installed and working, buy the car for the balance due (residual value) or trade the car in if there is equity. Mileage is pre-determined on the lease, so don’t budget less than you actually drive per year (15,000 mile per year is standard). If you plan to keep a car for more than four years, you might just purchase to begin with and not consider a lease. However, many people like to have that “new car security” (full warranty, reliability, no repairs) and find that having a 5 to 10-year-old car isn’t what they really wanted. So be honest with yourself when answering the questions above, you will end up better off than if you just make a rash decision you have to live with for years. One other important consideration is advanced propul-