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Is there any feeling like getting a new car? Well maybe a really nice luxury watch…but I would still take the car. For anyone who has been living under a rock for the past 5 months…you may not know what is going on. However for those of us that have not been taking hits from the bong we know that there is no better time to buy a car than right now.

Last week the 3 major OEM’s (FORD, GM, Chevrolet) went back to congress basically begging for another 25 Billion in relief funds so their companies would not fold and go under. Let me break it down like this if you still are not following what I am saying. If you are in the market to purchase a new vehicle, now is the time to do it. Most lease and finance rates are floating between 0-2%. Plus there are huge cash incentives just to take the car off the dealers lots. You can almost walk in these days and cut your own deal.

It would not surprise me to see most dealers go bankrupt by this time next year. Sad for business but great for buyers. If I only had the foreseight to wait till now to buy my car I would have saved a ton. But if you are looking to get yourself into a new vehicle now is the time to do it. Happy shopping everyone.

Should I lease or Finance my car?

Here is the question on a lot of people’s minds. Should I lease or should I Finance my next car? The answer really depends on what kind of person you are. Let me be a little more specific. If you are a person that likes a new car every 3-4 years then leasing is definitely a good option. However if you are the type of individual that holds your car for long periods of time 5 years or more than financing or purchasing the vehicle right out makes the most sense.

LEASING

Leasing has many benefits, cost and tax purposes being at the forefront. In most cases leasing a vehicle it will be considerably cheaper than financing…why? Because when you lease you are only responsible to make payments on the principal value of the car, not the cost of the car plus the taxes. There are also Tax benefits to leasing if you are self employed or own a business. Depending on what state you live in you maybe able to write off the whole payment granted it is less than the maximum allowed deductible. Another benefit is auto warranties. Usually the warranty will out last the lease. If you have ever owned a vehicle and kept it past 75,000 miles, you will know how large a benefit this is.

Finance

So by now most of you must be thinking financing is a complete waste of your time. I can’t say that I blame you. The major benefit to financing is owning the car. If you are the type of individual that prefers to own …well you have answered your own question. Another good reason to finance is building some equity. When you finance your monthly payment will be higher due to interest as well as time. For example, most finance options have you paying off the car in 4-6 years. Once you factor in the interest plus principal and taxes on the msrp the payment will naturally be more. If you are ok with this, your car will always be worth something and at the time you purchase another vehicle you will have some equity left to put towards your new car. Then the debate starts all over again.

Conclusion

This article is based off my own experience. I have owned multiple vehicles. Every car that I have driven in the past was purchased. The latest car I got, I decided to lease. Once I started to factor the numbers it just made sense to me. My suggestion to the people out there that are looking into leasing is, put down as little as possible. Since you don’t get any of the money back when you return the car. Although larger down payments will result in a lower monthly, putting zero down on a vehicle and making larger payments usually works out to be the same at the end of the lease. Why would you want to part with the money up front? Place the funds you were going to use for your down payment in a separate account and use it for your monthly lease payments.

Let us know what you chose to do and why.