If you are one of those kind of people who like to drive swanky cars and would be happy to change them every three or four years, then the best option would be to lease a car.
Though with some downsides associated with it, leasing a car may not be for everyone. One of the biggest disadvantages of leasing a car is that you do not own it. After the lease period is over, you will have to return it back, and in excellent condition. Also there is a limit of distance you can cover when you lease a car.
Usually the limit is set at about 12000-15000 miles and you may have to pay more each extra mile that you cross. This amount can easily be 25 cents oer mile. But if you don’t have much cash in hand and want to have a car for yourself without having to pay high monthly instalments, you should lease a car. The down payment for leasing a car is very low as compared to the down payment you will have put on the table if you were to buy that same car.
This makes it possible for you to lease a better car in the same or even less amount of money. Then your monthly instalments are very low as low interest rates are applied when you lease a car. Some things that you should be careful about when you lease a car:
Shop for a lease. Go to many agents or dealers. Some financial institutions also give out cars on lease. Find out the best deal for yourself. If your credit score is good, you can get better deals but some institutions offer ways to get a car even after bankruptcy.
Make sure to discuss what can happen in case of wear and tear.
Find out about how much penalty would you have to pay if you decide to end the lease agreement before the maturity period. Some agents levy heavy penalty in such a situation.
Read the lease agreement very carefully and have every detail written in it to avoid last minute shocks.
You have your and happily driving it for three years (most contracts are of this duration), you will have to return it back after that and in good condition otherwise you will have to a hefty penalty. Though you may not own it, but you have had the car, gave very less money to have it for that period and then you can now lease a new car or buy it. And also, pay attention and try not to make some common mistakes when leasing a car.
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