| By :
Dirik Hameed
When considering whether to buy a vehicle or car leasing it, there are many points to consider which can lead the individual the person in the right direction. Many advantages and disadvantages exist for these two forms of ownership. Car leasing is a good idea to consider if one is sure they will move to other towns or countries. This is because they can return the vehicle at the end of the period and walk away without further commitment. Financing of a vehicle is long term and requires one to stay on till they finish paying for it. The contract stipulation in financing says that the buyer is obligated to make payments each month regardless of the situation the are in. If they cannot pay, the car may be repossessed and all payments made prior to the date will not be returned to the buyer. There is an advantage to financing of a car in that as payments are made towards reducing the car note, the buyer builds equity. This equity is not available for lessees as they are expected to return the vehicles at the end of the period. The equity is important as it enables the buyer to secure other cars or lines of credit. The advantage with owning a vehicle is that the individual can sell it or trade it for another car at the dealership. It can also be passed down to a member of the family. Leasing payments are much lower than those of financing. This makes it easier for the lessee to lease out a vehicle that they have always wanted without having to buy it. It also is a great option as the lessee can choose another vehicle at the end of the lease period. Financing requires that the individual pay higher amounts that will lead to eventual ownership of the vehicle. Leasing requires the lessee to make some payments before taking the vehicle with them. These include a reduction in the monthly payment, a refundable deposit that is used in case the car is damaged or in a default, taxes and registration. Buying charges include taxes, registration and a down payment which reduces what is owed to the dealer. Purchasing a car allows the individual to pay off any outstanding balances as long as they compensate the dealer for any interests and fees that were expected at the end of the period while if one bails out of a car lease, they will be hit with fees and termination charges that could end up being high. When an individual leases a car, they have a mileage limit that they should stay under every year.One can negotiate with the dealer and pay a higher amount each month with an increased mileage allowance.Going over the mileage limit that is not authorized gives the dealership a right to place charges on the account. A financed vehicle does not place any limit to how far one can go but frequent driving can lower the value of the car when it comes time to sell. At the end of the car lease period which is usually two to four years, it has to be returned to the dealer where one decides if they want to buy it for keeps or want to lease another vehicle. Financing of a car and fully paying it off means that the individual does not owe any more funds and that the car is now theirs.
|
![[Valid RSS feed]](http://www.articlesbacklink.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
