Page 53 - August 2016 Newsletter

Lease versus buy: What’s best for you?
If you’re in the market for a new vehicle, those ads offering your expensive dream car for a low monthly payment can be very entic- ing. That is until you realize upon closer in- spection that the special deal in the ad is for a lease, not a purchase. And, more often than not, the cost of leasing appears to be lower than the cost of buying.
its. The mileage limits often range from 12,000 to 15,000 miles per year. If you exceed the annual mileage limit you’ll have to pay extra fees for it. Make sure you consider these potential fees if you have a long daily commute or regularly drive long distances for work or vacation. If you do decide to lease, you may be able to negotiate a higher
annual mileage limit.
Another issue to consider when leasing is that
most lease agreements typically have an “exces- sive wear and tear” clause, which means you are responsible for any damage. If your life includes routinely transporting kids or dogs, take these
MATT WISEMAN
So is leasing right for you? Unfortu- nately, there is no simple yes-or-no an- swer across the board. To help you make your de- cision, here are a few things you should consider
when deciding if leasing is right for you, or if you should purchase your next vehicle.
Finance
Think of leasing like renting a car, albeit for longer and with more fees and strings attached. First and fore- most, whether you are buying or leasing, the most im- portant number to focus on is the purchase price, not the monthly payment. Don’t be fooled by a low month- ly lease payment. Leases can be very appealing in that they typically allow you to drive a more expensive vehicle than what you could afford to buy, and every few years, you can lease a new vehicle with all the latest bells and whistles. Then, when the lease is up, there is no trade-in negotiation to worry about.
On the other hand, if you choose to buy a vehicle, you can get exactly the one you want and sell it whenever you want. And once you’ve paid off your vehicle loan, the car is yours to keep. Plus, if you drive your vehicle a lot, you won’t have to worry about excess mileage charges. If you aren’t aware, most leases come with annual mileage lim-
circumstances into account. If you buy your vehi- cle, you might reduce the resale value with excessive wear and tear, but you won’t have to pay extra for it after
the fact.
Ultimately, over time, it’s generally less expensive to
buy a car if you plan to keep it to drive yourself for many years or to pass it on to a new driver in your family. If you are set on leasing, make sure you ask about all the associated fees and costs, including lease initiation and disposal fees, which can add hundreds of extra dollars to your total expense. A lease allows you to drive the “latest and greatest” for a few years, turn in the keys and walk away. While that arrangement can be very appealing, it is important that you make sure you know just how much you’re paying for that opportunity. d
Matt Wiseman is the Director of Marketing at ISPFCU – Your Law Enforcement Credit Union.
52 CHICAGO LODGE 7 ■ AUGUST 2016
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