4 Auto Leasing Decisions
Leasing a car can be an attractive option if you drive reasonably low miles and enjoy upgrading your ride frequently. You can look forward to a new car every few years without dealing with large down payments and losing money on rapid depreciation. However, leasing can be more expensive than buying a car, and prohibitively so if you do not understand how leases work.
Understanding Auto Leases
Think of a lease as purchasing the right to drive the car for a set amount of time. Your payment covers the difference in the value of the car from the time you drive off the lot until you return it. Payments and terms are set around those values, along with a margin for the costs/profit set by the leasing company. It sounds simple, but industry jargon can make it difficult for you to keep track of these elements.
The initial value of the car is known as the capitalized cos...
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