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Deciding factor for buying car essay
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The decision to purchase a car is the second largest financial choice a person can make. There are a few options for vehicle financing. Since the majority of people aren’t paying cash outright for their vehicle, figuring out whether to purchase or lease the car can be overwhelming, intimidating and or confusing. Different elements come in to play when deciding whether or not leasing is right for your financial situation and lifestyle. Because the average consumer isn’t educated about the benefits of leasing a vehicle, leases are sometimes not even considered an option. I hope to highlight how there is value in leasing a vehicle, and more drawbacks when it comes to purchasing outright.
When leasing a vehicle, you can get more bang for your buck; meaning more features, and amenities from a higher trim level. The monthly payments are typically lower because you’re only paying for the depreciation of the vehicle during the specified lease term, and not the actual sales price. *** For example, on a $40,000 car, you’d finance the entire $40,000 purchase price with a car loan—with a car lease, you only pay a percentage of that. The car’s residual value is what the vehicle is expected to be worth at the end of the lease. The residual value is taken from the purchase price and the difference is what you make payments on. So if the car’s residual value is 55 percent after three years, for example, that means the $40,000 car would be valued at $22,000 at the end of the lease. The lease payments would be calculated based on the remaining $18,000 and not the full $40,000, along with interest, taxes and fees.
Leasing may also be a better option if you don’t have very much cash saved for a down payment. Usually a leaser requires a “drive off” o...
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...ary constraints. In order to get the payments lowered without having to come up with more money down, some lenders stretch the loan out to a longer term. Auto loans can last up to five or six years! Also, the longer the loan term, the more interest that ends up being paid in the end. Worst case scenario, when the car is finally all yours and the lender is paid in full, you’ve paid a ton of interest, have a seven year old used car with over 100k miles, and quite possibly repair bills.
When making the decision to purchase or lease a new vehicle, it’s important to weigh out all the pros and cons of every possible option: budget, driving needs, lifestyle and always most importantly, your credit history. Leasing may not fit everyone’s driving needs, but more people may opt for that choice if they knew how much they could save and or benefit from the alternative route.
Bird, Colin. “Should I Pay Cash, Lease or Finance My New Car?” Cars.com. May 5, 2013. Cars.com. November 24, 2013. http://www.cars.com/go/advice/Story.jsp?section=fin&subject=loan-quick-start&story=should-i-pay-cash&referer=advice.
...ferent jobs and different options like horsepower and inside. If you're a retailer and you are taking you buyers to look at a house you want a nice car to take them in. Not a van or a truck. If you're a construction worker you want a truck that works as hard as you do and not a van or a small truck.
But when you go to buy a new vehicle, you are faced with the question "What should
Monthly payments and the money put down play a big roll in obtaining a vehicle. Buying requires a down payment in the form of trade or cash whereas leasing requires little or no down payment. Monthly payments are based on the purchase price of the vehicle if bought, but if leased payments are based on the use of the vehicle. Although if leasing, the payment terms are incredibly shorter.
The biggest bonus to leasing is that usually, you do not have to pay for maintaining it. The dealer may provide servicing at a discounted price. You will have to find out what all is included in the lease agreement before you
A car with bad credit, just like any other car, will give you the ride you want. Okay, they might not be served on a platter but if you need a car.... but they are worth the ride. Customers suffer from bad credit circumstances do not mean they are bad people. It only means things happened! And every loan lender that is providing you with bad credit car loans do understand that. With car loans for bad credit you not only get the car you want there are added surprises on the runway.
The NAL still favors buying over leasing by $1216. The only other consideration would be that lease may raise the earnings on asset ratio above 12%. But since the PV of the lease payments is greater than 90% of the FMV (assuming the purchase prices is FMV), then it would be considered a capital lease and the asset would go on the Balance Sheet. Therefore there are no earning over asset ratio advantages to leasing.
As discussed in the book, they talk about how technology is a huge thing right now, and their will be cars that drive themselves, and it will have a designated area to arrive at. This can be a good and bad thing. When someone is persuading someone to buy this car in the near future, they will not include the downfall of buying these cars, they only focus on the good. With a car being all technology, the chances of a wreck happening are much slimmer. The chances of their being a glitch in the technology of the car, or the car completely shutting off and could leave someone stranded. Dealers only focus on the good, which is not good either. If they were to include the bad things about the car, the chances of that person buying the car would go down, so why would they do that? So, when one is trying to persuade someone to do or to buy, always include the bad even if it is
The less interest paid the more money you keep while paying off the vehicle loan. Something else to consider, this purchase is an investment with a trade-in value. It’s in your best interest to keep the vehicle in good condition.
In less than two months I spent about one thousand-eight hundred dollars on my old car. I had to change the battery, the transmission of the car, and buy new sets of tires for the car. The car battery gave out and I had to purchase a new one at “Auto Zone” for eighty dollars. There were better batteries available, but I did not buy them because I was saving money for my school tuition and spending almost two-hundred dollars on a battery did not seem like a good idea especially because I had an old car. After fixing the battery the transmission of the car broke down and I had to get a new one. Lucky for me
The Newsletter of National Car Rental – Middle East. Retrieved June 29, 2010 from http://www.national-me.com/downloads/nlpdf/N_Newsletter_No5.pdf
Buying a preowned vehicle is a substantially better investment over buying a new car. Automobile manufactures continue to produce cars at an alarming rate with little or no concern as to how quickly they depreciate. New car advertisements seem to be as common as the sky above being blue. It's very difficult to flip through a magazine or watch television without seeing an advertisement of a new car depicting everything that's missing from our ordinary lives. What the advertisers fail to mention is how these streak of lighting cars equipped with expensive gadgets depreciate at an extreme rate. This can lead to the American consumer becoming buried deep in debt, creating a cycle that may have drastic financial outcomes.
Knowing what we need: Before we go to buy used cars or truck there are few questions that we need to ask ourselves. How many people will be travelling? What are the things that we need to transports, what will we need the car or the truck most for? How much mileage will we be driving each day? Is it necessary to buy a truck or will a big car fit the situation? Depending on the answers we should approach to buy a used car or truck from the best dealer in the
If you need money to purchase assets for your business, leasing offers an alternative to traditional debt financing. Rather than borrow money to purchase equipment, you rent the assets instead. Leasing typically takes one of two forms: Operating leases usually provide you with both the asset you would be borrowing money to purchase and a service contract over a period of time, which is usually significantly less than the actual useful life of the asset. That means lower monthly payments. If negotiated properly, the operating lease will contain a clause that gives you the right to cancel the lease with little or no penalty. The cancellation clause provides you with flexibility in the event that sales decline or the equipment leased becomes obsolete. Capital leases differ from operating leases in that they usually don't include any maintenance services, and they involve your use of the equipment over the asset's full useful life.
With convenience comes cost. There are many costs associated with owning a car. Firstly learning to drive can be prohibitive, with lessons often out of a lot of peoples budgets. Once you have passed your test buying a car can also prove expensive. It is often the case we have to buy cheap second hand cars as new cars are very expensive. Sometimes this is fine and you can have a reliable car, but other times you pick one up that’s not been well maintained and can cost you a fortune in repairs and keeping it on the road.