News From Terre Haute, Indiana

Community News Network

March 25, 2013

The pros and cons of leasing a car

If you've paid attention to car commercials on television lately, you may have noticed there are some jaw-dropping deals on auto leases – or so it seems. Some sharp entry-level sedans carry monthly payments as low as $150.

But the first rule of shopping for any kind of car, whether for purchase or for lease, is to forget the monthly payment and instead, focus on the purchase price, interest rate and the length of time you'll be making payments.

“Unfortunately, I think most people define affordability by how much the monthly payment is,” said Mike Sante, managing editor of Interest.com. A lot of people think, if the check doesn't bounce I must be able to afford it.”

Sante and his team conducted a study in February and concluded that most consumers can't afford most new cars. And that's part of the seductive appeal of an auto lease – it looks much cheaper than buying. The monthly payment is lower and so is the down payment.

Paying for just part of the car

That's because, with a lease, you aren't paying for the entire car, just the part that you're using. In a typical lease, you surrender the car at the end of three years. The car still has a lot of its value left, which the lessor recoups when they sell the vehicle on the used-car market. You are only paying for the first three years worth of value.

But are you overpaying? That's the question you must answer before deciding whether leasing a vehicle is right for you. Often, it depends on the kind of vehicle and the price.

Let's look at two different vehicles and approach them from both a lease and sale perspective.

Before going any farther, let's get business leasing out of the way. Many businesses, both large and small, lease their vehicles because they can deduct the entire lease payment from their taxes. We're ignoring that in this discussion, which is intended striclty for consumers.

A pricey ride

Text Only | Photo Reprints
Community News Network
Latest News
TribStar.com Poll
AP Video
Crashed Air Algerie Plane Found in Mali Raw: Iowa Police Dash Cam Shows Wild Chase Arizona Prison Chief: Execution Wasn't Botched Dempsey: Putin May Light Fire and Lose Control Police: Doctor Who Shot Gunman 'Saved Lives' Israeli American Reservist Torn Over Return Raw: Protesters, Soldiers Clash in West Bank In Case of Fire, Oxygen Masks for Pets Mobile App Gives Tour of Battle of Atlanta Sites Calif. Police Investigate Peacock Shooting Death Anti-violence Advocate Killed, but Not Silenced. DA: Pa. Doctor Fired Back at Hospital Gunman Israel Mulls Ceasefire Amid Gaza Offensive Raw: Ukraine's Donetsk Residents Flee Official: Air Algerie Flight 'probably Crashed' 'Modern Family' Star on Gay Athletes Coming Out Obama Seeks Limits on US Company Mergers Abroad A Young Victim's Premonition, Hug Before MH17 MN Twins Debut Beer Vending Machine Today in History for July 25th
NDN Video
What's Got Jack Black Freaking Out at Comic-Con? Doctors Remove 232 Teeth From Teen's Mouth Bradley Cooper Explains His Voice in 'Guardians of the Galaxy' Deja vu: Another NYPD officer choke-holding a suspect Chapter Two: Becoming a first-time director 'Fifty Shades of Grey': Watch the Super Sexy First Trailer Now! Reports: Ravens RB Ray Rice Suspended For 1st 2 Games Of The Season Air Algerie plane with 119 on board missing over Mali Diamond Stone, Malik Newman, Josh Jackson and others showcase talent Free Arturo - The World's Saddest Polar Bear A Look Back at Batman On Film Through The Years LeBron James -- Dropped $2k On Cupcake Apology ... Proceeds To Benefit Charity Snoop Dogg Says He Smoked Weed at the White House Raw: Fight Breaks Out in Ukraine Parliament Chris Pratt Interrupts Interview To French Braid Intern's Hair Shirtless Super Mario Balotelli Dances While Ironing - @TheBuzzeronFOX Whoa! Watch "Housewives" Star Do the Unthinkable LeBron apologizes to neighbors with cupcakes Justin Bieber In Calvin Klein Underwear Shoot Samsung Pre-Trolls The IPhone 6 With New Ad
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
  • -

     

    March 12, 2010

activity