Lease, Rent, or Buy? Your Guide to Car Leases

When thinking about leasing a car, a lot of people ask themselves one question: Should I lease, rent, or buy?

Leasing, buying, and renting a car are all very different processes. Car leases and purchases are both methods of auto financing - with leasing, you're paying to drive the vehicle for a certain amount of time (often two or three years), whereas buying entitles you to actually own the vehicle.

Cars leasing is advantageous to drivers that prefer new vehicles, are unsure of their long-term vehicle needs, and/or do not want to deal with the hassle of selling their cars later on. Alternatively, buying is perfect for drivers who are more concerned with long-term costs and needs.

Renting a car is something different altogether. Unlike buying and leasing, whose costs are largely determined by set factors such as the vehicle's market value and expected depreciation, rental expenses do not follow a definite formula. Thus, renting a car is generally not cost-effective, and is only recommended for short term use (less than one year - ideally just a couple of days).

If you've decided to lease new cars, you might think you're done asking yourself questions, but here's one more to consider: Do I want closed-end or open-end car lease deals? Open- and closed-end leases are the two primary types of car leasing deals. Closed-end leases are more financially beneficial to the lessee, while open-end leases protect the leasing company.

Before going any further, it's important to remember one important concept of leasing a car: residual value. In car leases, a vehicle's residual value represents its predicted worth at the end of the lease. A ,000 car with a 50% residual percentage after 24 months, for example, would have a residual value of ,000. In this case, the lessee would agree to pay the difference - ,000 - plus the appropriate fees.

To predict a car's residual value, car leasing companies look at the history of the vehicle's make and model, in addition to factoring in the duration of the lease and the expected mileage. Therefore, the residual is an estimation - not a sure thing - meaning that at the end of the lease the vehicle could be worth more or less than anticipated.

Now, let's discuss the difference between open- and closed-end leases. Closed-end car lease deals are also known as "walk-away" leases, because they allow the lessee to simply walk away at the end of the lease, regardless of the car's actual value. The lessee will only have to pay for damages and/or extra mileage as stipulated in the contract. In an open-end lease, however, the lessee must cover the difference between the final worth and the forecasted residual.

Let's consider the ,000 New York lease mentioned above. Although the residual value after 24 months is ,000, it's possible that the car will be worth a lesser amount, such as ,000. In this case, the vehicle's worth will have decreased by ,000, even though the initial lease was only set for ,000. In a closed-end lease, the Brooklyn cars leasing company absorbs this cost, however open-end leases require the lessee to pay for the extra ,000 of depreciation.

What about if the car is worth more than expected at the end of the lease? In closed-end car leasing deals, the lessee can choose to purchase the vehicle at the residual price (as long as the contract included an option to buy). So, if the car wound up worth ,000, the lessee could buy the vehicle for ,000, then sell it for ,000 to profit.

A Simple Guide before Acquiring a Holiday Loan

A Simple Guide before Acquiring a Holiday Loan
We are all very excited as the holiday season is nearing. However, many feel anxious spending for presents, party, a new home project, or even for a holiday vacation especially when the budget is tight during this time of season. Not wanting to spoil the joyfulness of the holidays because of lack of funds, holiday loans are being offered here and there by a lot of companies. Before you can be drawn quickly in getting one, here are three simple things you have to remember:
First, think of your holiday goals in terms of your personal and family's needs. Jot down what you really want to have or do during the holidays. If you plan to have a vacation break with your family or be alone if you're single, make sure you have a clear plan where to go and how much you would want to spend for it, or research on places you want to go to set a clear budget. But if this coming holiday season, you wish to have something to buy or something to organize within your homes, then still list down the items and how much each item cost. Visit places where you can find shops that offer pre- holiday sale or special holiday coupons. Knowing your wishes or goals for the Christmas season will help you make a decision if you need to grab a holiday loan for that matter.
Second, assess your current financial status. One question you can ask yourself is, "Would I be able to give the monthly pay-off if I acquire a holiday loan?" It is very important that you could do a simple addition and subtraction of your monthly income. Is it visible to you and viable on your finances that you can live after the holidays with another additional outlay? Undoubtedly, the status of your finances should be clear so that you can decide suitably if you will acquire a holiday loan.
Lastly, do a research on companies offering holiday loans (even when you are still contemplating on getting one). In order to have a better insight if a loan for the holidays is a good step for you, give yourself time to research on the different offers by the different companies. Get the disadvantages and advantages to enable you have better options or best deals when you decide to have a go with it. It is good that you personally visit the business office of the company that offer such loans and spend time with their representatives so they can directly answer questions you have in mind. You can research on the internet to get a listing of companies offering holiday loans and check if they are within your area so you can pay a visit. Compare them based on the quality of service they provide, flexibility of loans, payment options, good feedback by customers, and a reputable market position.
So before you really have to settle on a holiday loan, consider these things out and it might help you have a rewarding and a happier holiday season.