Auto Car Loans

In the fast lanes of life, no one can imagine living without their cars. You can easily drive your dream car if you lease it.

Your leasing company will also give you the option of buying the leased car. There are two kinds of car lease buyouts or payoffs:

1) Lease-end buyout (at end of lease period)
2) Early buyout (during the lease period)

Buying your leased car is always better than buying a used car from a dealer who is an absolute stranger to you. You know the car’s history and if you have been maintaining it properly, then it is advantageous to you.

Also if you have surpassed the mileage restrictions and don’t want to pay the exorbitant additional fees, buyout will be very useful.

For buying the car, you will need to avail an auto loan. But before that, it is essential that you consider few things. Prevention is better than cure, isn’t it?

Read the document carefully

You need to be cautious while dealing in any financial matter. If your company doesn’t allow an early buyout, it is not wise to go for it. The reason is that you will have to pay heavy penalties or extremely expensive termination fees. So, do read the lease agreement carefully.

The condition of the car

While going for lease buyout, carefully check the condition of the leased car.

If you have been maintaining it well, then you need not worry about it. But if the leased car has depreciated a lot, there is no point in buying it.

Understand the Purchase option price/Residual value

Your lease agreement will have a “Purchase Option Price” which is set by the leasing company. This is the price that you will have to pay if you decide to buy the leased car.

The price is set taking into account the value of the car at the end of the lease period and an additional purchasing fee.

Don’t forget to see how your leasing company manages your payments. Few companies consider initial payments on the car as interest payments instead of payments on the principle. So, you may owe much more than the residual value.

Compare the residual value with the market value

You will be at the benefit only when the market value will be higher than the residual value of the car. You can determine the market value with the help of Kelly Blue Book or any other website that provides authentic data. If the car is valued lower than the residual value, then it will be better to end your lease and search for another car. Continue Reading

The Advantages of Car Leasing

No doubt about it, your car is essential to your life! It also represents one of the most expensive bills you have to pay every month. Perhaps the best answer is car leasing. By leasing your car, you can drive a newer vehicle for less money. Here are some of the major advantages of leasing your car.

Lower Upfront Costs

Getting into a new car usually requires that you have quite a bit of money to sink into the automobile right from the start. You need a down payment as well as money for tax and license. All of these expenses are significantly lower when you choose leasing over buying. Some leases require a small down payment, but they rarely require as much up front as is needed when you purchase your car. In addition, you can probably lease a more luxurious car than you could otherwise afford.

Lower Monthly Bills

Probably the most alluring aspect of leasing a car is the lower monthly expense. The monthly lease payment can be about half of what you’d have to pay to be buying the car outright. Along with smaller payments is the advantage that you will never be in a position that many car buyers are in, in which the vehicle itself is not worth as much as the buyer owes on it. Cars and trucks depreciate quickly. The equity you are paying for when you buy the vehicle, however, accrues slowly. This is because the first payments you make tend to be mostly interest with less applied to the principal.

Lower Maintenance Costs

When you lease your car, you can afford to drive a new car that is still under the manufacturer’s warranty. Many drivers cannot afford to buy a newer car, and are saddled with more repair bills. By getting a lease that corresponds to the warranty, you can skip a lot of the maintenance expense. If you are trying to avoid maintenance headaches, leasing can be the way to go.

Tax Advantages

Because you do not own the car, you probably will not have to pay property tax on it. This varies from state to state, however, so check your own state laws to be sure. Leasing also brings a tax break if you happen to use your car in the operation of your own business. Business owners can deduct the expense of a leased vehicle. Continue Reading