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Determining whether you should buy or lease is not as simple as a little arithmetic and a few facts. It is also a lifestyle decision and you must evaluate your needs and desires as well as the numbers before you decide.
Mile Limitations. When you purchase a vehicle you can put as many miles as you like. Most lease programs have strict limitations on mileage. Depending on your contract it is usually between 12,000 and 15,000 miles annually. Driving over the allotted miles can result in additional charges when your lease ends. Make sure you know what these charges are, just in case.
Normal Wear and Tear A lease contract always allows for normal wear and tear. If you do not normally keep your vehicles maintained you should probably buy to avoid additional charges at the end of your lease. We will show you what each lease company considers normal wear and tear.
Normal Ownership Time If you typically buy a new car every two or three years a lease may be right for you. If you traditionally like to keep your vehicle for many years, an outright purchase may be the ticket. Keep in mind that if you are able to purchase the vehicle at the end of your lease term and the current terms are exceptional this may be a good way to avoid a lot of up front money.
Sales Tax Savings When leasing, instead of paying sales tax up front, each monthly payment is taxed, as opposed to paying a lump sum on the entire value of the vehicle when you purchase.
Ask your accountant, because there may be tax incentives especially if you are self-employed and use the vehicle for business reasons.
When you purchase and finance a vehicle there is about a 2 year period where you owe more than the vehicle is worth. In other words, if you total the vehicle you may actually owe the lender some money. Your lease agreement should include GAP INSURANCE, where the lease company has insurance to cover such dilemmas, should the unfortunate happen. Ask our Sales Rep about Gap insurance.
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