The Pros and Cons of Leasing a Car
A new car is one of the most popular signs of success in American culture. Along with four to five years of monthly car payments, a new car brings the pride of ownership, and a certain amount of security that if something should go wrong, it will usually be corrected for free or at least minimal cost to you. Be aware that this may not be the case. Here are some advantages and disadvantages of buying a new car.
Advantages of Buying a New Car
Status and pride of ownership
A lessening of anxiety about possible repair bills
___________. You fill in the blank because I can't think of any more.
Disadvantages of Buying a New Car
Collision insurance is mandatory until you are entirely paid up. Remember to calculate the increase in your insurance bill into the cost of your new car.
Your first drive from the dealer's lot to your home costs you $3,000 to $5,000. A new car depreciates that much the instant you leave the lot.
You have committed yourself to paying at least $200 a month (very often much more than $200) with the assumption that you will be able to pay that.
A new car is often not worth the same amount that is owed toward the end of the loan.
You can buy an extended "bumper to bumper" warranty, but you usually will receive a LIMITED warranty. BE SURE TO UNDERSTAND WHAT YOUR WARRANTY WILL COVER. Do not sign anything until you understand and agree to all the terms of the contract. Do not assume that the whole car is warranted. Also, do not assume that everything is going to be all right with the car. Get everything in writing; that is everything that you expect to be covered. A warranty is not a Carte Blanche.
Sometimes, in order to keep your warranty you must have your car serviced at the dealership only. Remember that a high percentage of a dealer's income is service and maintenance.
Things to Look For
Ask yourself, "What can I realistically afford?"
What car has the best proven track record? Check out Consumer Reports and other consumer magazines.
Stay away from newly designed engines and transmissions. Let someone else be the guinea pig.
Look for a distinguishable color, but not one that is offensive. This will affect the resale value. If you plan to keep the car for a number of years, check what that car would be worth on a trade-in or resale.
Look for something that will fit your needs. Ask yourself "How will I use this vehicle?" You be the one to determine how much interior space you need, or what accessories you will use. Don't let the dealer talk you into MORE.
Next Month
How to Buy a Used Car.
NOTE: Ron Craig wrote the "Car Keys" column which appeared in the February issue of the Community Press.