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Lease Or Buy: Which is the better car deal for you?
Shana Haines, Ralph Schomp Automotive

"Zero Percent Financing for your new vehicle" screams out at you on the television, radio and every newspaper you open. The wheels in your head start turning, justifying the purchase of your next new car because either, one, your current car is almost on its last leg, two, it’s too good of a deal to pass up, three, you have simply outgrown the sports car you had in college and the kids really need more room or four, you just plain deserve it. What ever your reasons, you need to look at what your savings really will be and if the low interest rates available are the best way for you to pay off your new car.

With all the hoopla of low interest rates you may be wondering whether it is a better deal to lease or finance your next vehicle. I offer some basic advice on both leasing and buying (the conventional way having a loan through a bank or credit union). Financing your car is a great option for those of you still holding onto your first Girl Scout Uniform, the dance outfit you wore in your 3rd grade recital and your first retainer. If you tend to keep your car until the wheels fall off, low cost financing is a remarkable offer. However, you need to research which offers work best for you. Many of these 0% or 1.9% finance offers are available only on very limited terms. If you are able to buy the car you want and finance it for a 24 or 36-month term these are great deals!! Some manufacturers will offer a rebate in lieu of the lower finance rate. Make sure you ask and take advantage of this free money if it is available. Also, realize the savings of the lower rate may or may not make up for the savings of a higher rate, but lower price on the car. Also, find out if the rate is offered by the dealership, or by the manufacturer.Many dealers will offer a lower rate on the loan, but again charge you more for the vehicle. This usually will offer you only a very small savings, if any, over a regular interest rate and lower selling price. Manufacturers’ incentives rates are usually available on the car no matter what the selling price. Be sure to check with your own bank or credit union for what type of rate you would get through them. The Internet also is a good source of information on what types of loans are available. But remember, if it sounds to good to be true, it probably is!! Although interest rates are what we typically see advertised as being at all time lows, leasing a vehicle now can be just as attractive. Lease rates are also a form of interest and therefore lease payments are lower now than in the past. Leasing allows you to only pay for the portion of the car that you are going to use. If you tend to only keep your car 3 years, why not only pay for 3 years of use instead of the entire price? Leasing will typically allow you to drive a more expensive vehicle for a lower payment. Leasing is for those of you that want to drive a car under warranty most, if not all, of the time you have it, have a new car every few years, don’t have a lot of money for a down payment or just like to change things to keep them fresh. Leasing is not for those people that drive 100,000 miles per year. Most leases will offer a maximum number of miles available over the term of the lease. For many, leasing offers advantages for sales tax as well.You only pay tax on your monthly payment, not the entire price of the car (check your local tax ordinances). Remember, no matter how you pay for your next vehicle, whether it be finance, lease or cash, the selling price of the vehicle should always be the same. Make sure you read the fine print of all contracts for early termination/payoff penalties, mileage limitations or other fees involved. If you are in doubt, don’t be afraid to ask; it is your hard earned money and time being spent. Shana Haines can be reached by e-mail at shanahaines@schomp.com.