When car buyers in Omaha are ready to buy a used vehicle, many of them choose the lease option. Even with so many Omaha used car buyers leasing, many of them don't really know what a lease is and are completely dependent on the word of the dealership's salesmen and sales managers.
That is not a good idea.
Here's a brief guide for new car buyers in Omaha that might help give you an idea of what leasing a used car is all about.
What Is A Car Lease?
Essentially, when you lease a car, you are renting that car. A lease is a long-term rent. You never really own the car but you are responsible for any damage you do to it. At the end of the lease, you can either turn the car in or buy it.
Why Would A Buyer Want To Lease A Used Car?
The biggest reason most people lease a used car is because for the typical used car lease, payments for that lease will usually be lower than payments on a car loan would be - It is a way to drive more car than you could afford if you actually bought the car.
Some people prefer to lease a used car because leases typically run as long as the bumper-to-bumper warranty and after the bumper-to-bumper warranty runs out, they can simply turn in the car, walk away from it (assuming there is no back-end costs) and choose a newer model.
Some people do not like to own a depreciating asset.
Some people do not like having to sell an old car.
If you lease a car and use it primarily for business, it can be a write-off on your taxes.
Why Would A Buyer Not Want To Lease A Used Car?
Early lease termination fees - if you break a lease, you can expect to pay a hefty termination fee
That is not a good idea.
Here's a brief guide for new car buyers in Omaha that might help give you an idea of what leasing a used car is all about.
What Is A Car Lease?
Essentially, when you lease a car, you are renting that car. A lease is a long-term rent. You never really own the car but you are responsible for any damage you do to it. At the end of the lease, you can either turn the car in or buy it.
Why Would A Buyer Want To Lease A Used Car?
The biggest reason most people lease a used car is because for the typical used car lease, payments for that lease will usually be lower than payments on a car loan would be - It is a way to drive more car than you could afford if you actually bought the car.
Some people prefer to lease a used car because leases typically run as long as the bumper-to-bumper warranty and after the bumper-to-bumper warranty runs out, they can simply turn in the car, walk away from it (assuming there is no back-end costs) and choose a newer model.
Some people do not like to own a depreciating asset.
Some people do not like having to sell an old car.
If you lease a car and use it primarily for business, it can be a write-off on your taxes.
Why Would A Buyer Not Want To Lease A Used Car?
Early lease termination fees - if you break a lease, you can expect to pay a hefty termination fee
Limitations on how much you can drive the new car - leases usually allow the car to be driven for 12000 miles a year, or 1000 miles a month.
People who drive a lot of miles might face huge penalties when it comes time to turn in the car and they're 5000 miles over their limit.
Higher insurance costs - leases often require more insurance coverage than a car purchased conventionally would.
Things To Remember When Leasing:
All cars depreciate by approximately 50% in value by the end of three years, whether you buy them or lease them.
Depreciation is the amount of market value that your car loses over a period of time. When you lease, you're mostly paying for the depreciation of the vehicle. The difference between the "capitalized value" - or the sale price - and the "residual value" - the predicted value at the end of the lease - is the depreciation amount.
Even if you lease a vehicle, the price of that vehicle is still important. If you lease a car with an MSRP of $30,000 and it's projected value at the end of 36 months is only $19,000, you pay for the depreciation cost of $11,000, plus whatever interest rate is being charged.
On the other hand, if that same car has an MSRP of $30,000 and you negotiate a price of $28,000 for the lease, that same vehicle still has a projected value of $19,000. Your payments will go down because the depreciation has gone down by $2000 over the term of the lease.
Use An Online Lease Calculator To Get Accurate Numbers
There are many leasing tools that you can use online to get an idea of exactly how much leasing a vehicle would cost you versus buying a vehicle. Lease Wizard is a tool that I have used in the past, and has worked just fine.
Higher insurance costs - leases often require more insurance coverage than a car purchased conventionally would.
Things To Remember When Leasing:
All cars depreciate by approximately 50% in value by the end of three years, whether you buy them or lease them.
Depreciation is the amount of market value that your car loses over a period of time. When you lease, you're mostly paying for the depreciation of the vehicle. The difference between the "capitalized value" - or the sale price - and the "residual value" - the predicted value at the end of the lease - is the depreciation amount.
Even if you lease a vehicle, the price of that vehicle is still important. If you lease a car with an MSRP of $30,000 and it's projected value at the end of 36 months is only $19,000, you pay for the depreciation cost of $11,000, plus whatever interest rate is being charged.
On the other hand, if that same car has an MSRP of $30,000 and you negotiate a price of $28,000 for the lease, that same vehicle still has a projected value of $19,000. Your payments will go down because the depreciation has gone down by $2000 over the term of the lease.
Use An Online Lease Calculator To Get Accurate Numbers
There are many leasing tools that you can use online to get an idea of exactly how much leasing a vehicle would cost you versus buying a vehicle. Lease Wizard is a tool that I have used in the past, and has worked just fine.
