New and Used Car Leasing

New Cars - Leasing - Used Cars

New car buyers who find themselves upside down or owing more than their cars worth, when going to get their next new car probably should have considered leasing or putting more down on their new car purchase. For car buyers that normally change cars every couple of years, leasing can make more sense than repeatedly buying new cars.

In a lease, the customer pays an agreed upon amount each month to keep the car for a set period of time, usually just a few years. The amount the customer pays is based on the amount of value the vehicle loses during that time.

New Car Leasing works best for customers who are sure they will drive no more than an agreed-upon number of miles per year and who take good care of their cars. New Car Lease contracts include penalties for damages to the car and over mileage.

Another way to stay on the upside, of your cars value is to simply purchase a less expensive car. Used cars can offer a practicable, and much less expensive, alternative to a new car. Get pre-approved on a used car loan before searching multible dealers for financing options.

When shopping for a used car, keep your eye firmly on the used car price and not the monthly payment. There is no point in discussing monthly payments until you've negotiated the lowest possible used car price first. The reason behind this is, say that you could afford a $400 payment. The salesman can raise the used car price and stretch your payments out over a 72-month term.

A 60-month term on $20,000 at an interest rate of 7.421 equals a car payment of $400. A 72-month term with the same interest rate and same payment of $400, you would have to finance $23187. The car dealer would make an additional $3,187 off of your used car purchase. This would more than likely put you upside down on your car purchase before you even drove it off the lot.