When it comes to buying a car, leasing is often seen as a very attractive option. The ability to get a brand new car, for a lower monthly payment, knowing you can trade that car in in the end and take on a new car once again, can often seem like the best deal out there. However, when it comes to the financial gains, and your lease is at its end, there are a few important things to consider.
Remember that the dealership wants to sell you another car which could mean another long term financial contract. Dealers make great money on leases, and although the option to get into a new car every 2-3 years may seem nice, financially it doesn’t really get you very far.
Additionally, if you are over on your mileage, if there is any damage, even bad wear and tear on the tires, you could be in for a rude awakening. These are all costs to factor in – ones you can’t get away from if you are turning over that leased vehicle. Even if you decide to enter into a new lease with a new car, you’ll still be on the hook for these costs.
If you don’t want to turn the leased vehicle over, and instead intend to buy it out, this often makes the best sense, especially if your car is up for lease buyout and you have gone over what you agreed to in the contract. Financing the car means you usually keep payments close to what they were in the lease and you don’t need to worry about the other costs.
You can turn your lease into an asset by buying it out even if you plan to have another new car in the future without the pressure of having to buy the new car right now! That being said, although financing through the dealership may seem like the easiest option, it may not be the most cost effective.
The better option is to take on a short term loan and buy the car outright from the dealer. During a short term loan, you pay less. If you finance it over 2 years, the car is yours and you will end up paying far less in interest than you would financing through a dealer. Also, when the time comes to trade in, instead of having a negative balance, you can have a paid off vehicle that still has value. It is a win-win.
Instead of taking on another long term finance to buy out your lease, call Prudent Financial today to discuss your options to buy the car outright with a loan. 1-888-852-7647.