Lately it has become very popular car leasing because the monthly payments are usually lower than in a purchase transaction.
If you are considering buying a car, maybe you are facing the dilemma of purchase or lease.
Faced with this dilemma is important to know how the process of renting a car works.
The main benefit of a lease is that you can take possession of a new vehicle that is always under warranty and whose maintenance costs would be very low, except that the car you arrendarías could be a better brand and model of what normally could to buy.
The idea of leasing is that you can finance a luxury car by quotas lower payment because you do not have to pay the full cost of financing a vehicle, but only pay for use during a certain period of time, is usually two to three years.
downpayment: Also known as entry fee, in most cases it is less than the entry fee for the purchase of a car and is a security deposit and first month’s rent, along with other charges.
Monthly payment: The amount of monthly installments is based on the difference between the market price at the time of the transaction, and the residual value at the end of the lease, and this difference is financed considering the monetary factor.
As with any financial transaction, your credit score will affect the terms of the lease. Therefore, the monetary factor will vary according to your credit.
You can determine the annual interest rate simply by asking what is the monetary factor lease and multiplying this factor by 2,400. For example, if the monetary factor is 0.00375, the annual interest rate is 0.00375 x 2.400 = 9%.
Number of months of the lease: the lease period in months. In most cases is 24 or 36 months.
Residual value is the estimated value of the car at the end of the lease period, and is based on the price marked on the label or MSRP, and not the negotiated price. The residual value can range between 50% and 58% of the sticker price.
Mile limits: There is a limit of 10,000 to 12,000 miles per year, in some cases may be more miles .. If you exceed the mileage, you will be charged for each additional mile. The financial charge on average 18 to 22 cents extra mile.
additional charges at the end of the lease: At the end of the lease period, you must only return the car to the dealer, and if the vehicle conditions are good and according to the contract terms, you should not pay anything extra.
The vehicle must be delivered in good condition otherwise the dealer can add charges for damages. It is therefore advisable that before returning the vehicle, you take it to the dealer for a pre-inspection of the car, and thus can make arrangements.
Purchase: Most leases give you the option to purchase at the end of the contract, so months before the end of the same, the finance company will contact you to try to negotiate an agreement for you to stay with the chariot in other words try to sell it and if you accept and do not have the money to buy it, they themselves can convert the lease into a normal car loan.
Eventually, this option will be more costly than if you had bought the car from the start, and that is why you should make a calculation municioso in the process.
Another thing to consider is that if you lease a house, not accumulate any assets and the same happens when you lease a car, and if it is true that cars depreciate over time, always at the end even the residual value is them you can use it to exchange it for another car, sell it, or donate it to a non-profit organization.
If you are still faced with the dilemma you can use a calculator that will finally help you make the best decision.