Even at the best of times when the economy is booming, it is often difficult to judge whether it is more cost effective to lease a car or to simply buy one outright. Along with the fact that you need to have good to excellent credit to get good rates on a car loan if you purchase a vehicle, there is the resale value to consider a few years down the road.
Some people simply don’t want to keep buying and selling cars every three to five years so they opt for leasing as a viable alternative. In order to determine which the better option is, use a Car Lease Calculator to see which would provide the most cost effective solution for you.
What Is a Car Lease Calculator?
Very simply, a Car Lease Calculator is a software program which is user-friendly and can be found online at a number of sites. You will be asked to answer a few questions and after you’ve hit the ‘Calculate’ button you will most likely be able to determine if leasing is really the best option.
Questions you will always be asked would be the cost of the new car, the monthly lease costs, the length of the contract expressed in months (not years) and sometimes a Car Lease Calculator will ask you for the resale value of that vehicle after a given number of months, usually at the time of expiration of the lease. This will help you to see just how much money you would be losing in value should you opt to buy a new vehicle instead of leasing.
Why Use a Car Lease Calculator?
Depending on your driving record, the cost of insurance, the cost of upkeep on a vehicle and of course the amount of money you would need for a deposit, leasing may be the most affordable option. Still, this is something you wouldn’t know unless you had the results from the Car Lease Calculator in front of you.
Of particular import is the resale value of the vehicle. Many people are unaware of this, but the moment you drive a new vehicle off the lot, it immediately devalues significantly. According to J. Paul Getty the billionaire oil tycoon, his motto was that if something appreciates you should buy it, but if it depreciates you would be better of leasing it. This is not to say that all leased cars are better deals than buying a new car, but remember, the moment you drive a new car off the lot it has lost thousands of pounds in value.
If you don’t want to be bothered with all the taxes, repairs, insurance and saving for a deposit, leasing a car may provide the cheapest solution. For businesses as well as individuals, leased vehicles are often the cheapest way to go – especially with the high cost of Car Tax. A Car Lease Calculator can help you determine which option is better for you in terms of your finances and all you need to do is plug in a few figures on the screen and just let the program do the calculations for you. The decision is still yours, but at least you will have solid figures in front of you to base your decision on.