By Bob CraneThere are pros and cons to both leasing and buying a new car and it pretty much comes down to your own personal preference and what your long-term plans are for the vehicle. If you are running a business and use the car for business it may be best for you to lease so you can deduct the lease payments from your taxes.
The best advantages of a lease over a purchase are:
1) You only pay for the part of the cars life that you have used so your payments are lower than they would be had you purchased the vehicle. Since you are only paying for part of the cars value you are able to possibly buy a more expensive car for the same price that it would have cost you to buy a less expensive one. If you are in business and you take clients out in your car it would be better for their first impression of you to be taken out in a nice car.
2) The warranty of a leased car will never run out as long as you own it so you will never have to worry about paying for major repairs. They will be taken care of by the dealer. You will have to keep up with routine maintenance as it is spelled out in your contract but you would have to do that even if you bought the car to keep the warranty in force.
3) As a lease owner your car is always new. You will always have the newest features available and never have to worry about your car becoming obsolete. As a business owner you wouldn't want to take a client out in an old rattle trap and expect them to really want to do business with you. It is always best to take clients out in a nice car so it doesn't become the focus of your meeting your actual reason for the meeting will stay in the forefront of the conversation and not the car.
4) You never have to think about the trade-in value of your car or what you could get for it because that is already figured in to the lease price when you first sign the contract. There are no surprises with a lease everything is spelled out for you right up front so you know what to expect and can budget accordingly.
There are a few disadvantages to leasing:
1) You have to be careful how you treat the car. You cannot leave it somewhere where it will get damaged even just a scratch or you will have to pay for the damage to the dealer when you return the car at the end of your lease term.
2) The mileage will have to be monitored too. Usually when you sign a lease you pay for a certain number of miles in advance when they calculate your lease payment if you go over that amount you usually have to pay a penalty in addition to paying for the extra miles. So make sure you over estimate the number of miles you plan on driving the car when you first sign the lease. The cost per mile is much cheaper when you first sign the contract than when you bring the car back.
3) Sometimes car insurance companies charge more to insure a leased vehicle than they do a purchased one. So be sure to give yourself plenty of time to shop for the best insurance rates before you set foot on the dealers lot to look for a new car.
In my home-based business I use the car quite often to go and visit prospective clients and the ease at tax time with the lease payments has made it worth it for me. Plus I get to drive to my clients meeting in a brand new car which really looks good and gives my business credibility.
Bob Crane is the author of http://www.alltoyotacorolla.com a website that helps you find what you need for your Corolla. He also runs a blog at: http://www.fixnkeep.com The blog discusses preventative maintenance and corrective fixes on cars and things around the house. "Why buy new if you can fix what you already have."
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