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September 11, 2008

Knowledge Is Your Best Insurance When Buying or Leasing a Car

Wkw001w_paper In Los Angeles and most of California, having a car is essential to daily life: driving to work, school, the gym, the store, to friends’ houses, etc. In fact, I couldn’t imagine not having a car in Los Angeles. The high demand for cars is nothing new. Still, many young women are plagued with questions of what, where and how to buy one. This can be overwhelming, especially if you’ve never bought a car before.

One of the major questions that arise for women in their 20s when purchasing a car is buy or lease? Fortunately, the Federal Reserve Board has put together a Quick Consumer Guide that explains the major differences between buying and leasing a car as well as a consumer’s rights and responsibilities for each option.

Wkw015w Leasing? Pros vs. Cons
When leasing a car, it is important to bear in mind that the car is not yours. This means that the owner, or dealer, can charge you for mileage, damage or excessive wear, acquisition fees, and early termination fees. Generally, the mileage count is between 12,000 and 15,000 miles per year. You may request higher mileage limits for an extra monthly fee. If you are considering a lease and know that you will exceed 15,000 miles per year, ask for higher mileage because the end charges for going over may exceed the monthly charges.

However, the monthly payments for a lease are generally lower than a loan payment for a bought car. This is because for a bought car, the consumer is paying for the entire purchase price of the car as well as interest, taxes, finance charges and other fees. In a lease, the payments are determined by the depreciation of the vehicle during the lease as well as any taxes, fees and interest. You are also obligated to pay for maintenance, insurance, inspections, personal property taxes and any traffics tickets. 

One benefit to leasing is that once it’s over, it’s over. You can return the car, pay any end-of-lease fees and charges, and be done. You do not have to worry about the lowered market value of the car for resale or trade. That is, of course, if you don’t plan on purchasing the leased car.

Final Thoughts
Other than these few things, a leased car and a bought one are not much different. If you choose to lease a car, shop around for the one that works for you. Ask about all payments including up-front, close-out, monthly and mile charges beforehand so that there will be no surprises. Decide on mileage, vehicle value, length of lease and options to purchase. Consider special offers and alternatives as well. Remember, you can always walk away from a deal if you do not feel comfortable. Fortunately there are many female friendly car dealerships that will work with you in finding a lease agreement that will work for you.


Alyse_speyer_s By Alyse Speyer
AskPatty Contributor

Alyse Speyer has a BA in Literature from the College of Creative Studies in the University of California, Santa Barbara. She has several published poems in the 2008 Spectrum and a short story published on UnderThisRedRock.com. She was also an editor for 2008 Into the Teeth of the Wind, a UCSB poetry publication. She speaks Spanish, French and has an understanding of Catalan. Alyse currently works as a freelance copywriter and blogger and writes for a variety of fields. She specializes in Search Engine Marketing and Optimization, web copy and editing.

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