More individuals as well as small business operators and professionals are exploring the possibilities of car leasing on a yearly basis as opposed to owning a car. Recent depressions in the car business have encouraged more dealers to experiment in the field, and in many areas advantageous prices have already been offered to individuals. There are angles that are often overlooked.
In the first place, if you use a car only occasionally, whether for business or personal reasons, it would probably be cheapest for you to rent it on a daily or weekly basis when you need it, but face it. In our go-go world that is not happening. Short-term rental fees can be very attractive indeed when you consider all the investment you do not have to make buying, keeping, maintaining, and insuring the car when you’re not using it.
When weighing a yearly lease, however, an opposite view must be taken. The more you use a oar, the more mileage you put on it each year, the better the leasing deal could be for you. That’s because there are certain fixed charges which you pay as a base while you add so much a mile.
You can figure that the average small-medium car, run about 15,000 miles a year, will cost you about $1,000 a year to keep up, plus gas and oil, unless it’s a lemon. If it is a lemon the advantage is all on the side of leasing. If you lease a lemon you can have the superb satisfaction of taking it back and getting another car without question. As a matter of fact the good lessor is anxious to keep your car in top condition for you.
If you drive a car with some faults in it you’re likely to break down and need expensive repairs. So dealers see to it that you’re always in the best running order. Which is a second advantage of leasing over owning-no shady repair bills from doubtful mechanics for doubtful repairs. If the car doesn’t run perfectly you just take it back and get it fixed on the house. Sometimes easier said than done.
The trouble with all this is that if you go right out and try to lease one car for one year you may find that the price in your area is too high, that is it is higher per month than the total of payments on a car you buy, plus maintenance, plus insurance. Here are two points, though, that you must not overlook:
1) The carrying charges on your car installments. Make sure you really know how much they come to.
2) If you normally buy for all cash, consider the USE of the money.
If you operate a business you might want to use that couple of thousand dollars used for down payment some other way instead of tying it up in a car. If you run your personal life like a business (and you should), by investing your spare money so that it earns the most possible, you must make a similar calculation.
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