Can You Afford the Car You Drive?
Joan Rivers has a new show called “How’d You Get So Rich?!” I have to say, that very question crosses my mind every time I drive on the freeways of L.A. The proportion of Porsches, Range Rovers and BMWs seems to far outweigh the actual population of wealthy people in this town…So, how can all of these people afford such fancy cars?
Appearances can be deceiving – a lot of luxury car drivers may not be so rich after all. According to Leaseguide.com, 75% of luxury vehicles are actually leased, rather than owned. Leasing is a popular alternative to purchasing a car, and a big reason is because in the short term, it is cheaper to lease than to buy. So, many consumers like that leasing allows them to “afford” to drive a nicer car than they would actually be able to own. A nicer car for less money…Sounds like it could even be Fab & Fru, right? Or is it too good to be true?
If you own your own business, there may be tax and cash flow advantages to leasing a car for your company. But as an individual, you really need to take a look at your lifestyle and long-term priorities before leasing your way to luxury…
The Plus Side of Leasing
More Car For Less Money
The up-front costs and monthly payments associated with leasing are generally considerably less than what it costs to finance and purchase the same vechicle. In the short term, having the opportunity to drive a nicer car than you could ever afford to buy outright seems like a dream come true…
New Wheels Every Few Years
The typical car lease runs 2-3 years. That means every few years you can get a “new” car and continually “be seen” in the latest, greatest set of wheels.
Because you are leasing the car for a set amount of time, it will be under warranty for the entire term of your lease. And when the lease is up, you just return the car without the hassle of re-selling it or trading it in.
**Hmm…less money, nicer cars, and no hassle – this leasing thing sounds pretty good! So, what’s the catch?| Print
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