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Car buying and leasing - first time buyer
Hi,
I'm new here, and the reason I'm posting is because I am looking to lease or buy a new car.
This is the first time that I will be purchasing a car, and am looking at leasing.
If anybody has any suggestions (i.e. books, videos, sites) please let me know.
I don't want to get taken for a ride, and I want to be smart about my purchase in order to avoid getting something I'm not able to afford.
Thanks.
I'm new here, and the reason I'm posting is because I am looking to lease or buy a new car.
This is the first time that I will be purchasing a car, and am looking at leasing.
If anybody has any suggestions (i.e. books, videos, sites) please let me know.
I don't want to get taken for a ride, and I want to be smart about my purchase in order to avoid getting something I'm not able to afford.
Thanks.
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If you're a lower mileage driver (15k miles/year or less), have good credit, and take good care of your car, leasing will typically work out better in the long run depending on the car. RealCarTips and Leasehackr both have great resources to learn the ins and outs. Just develop a solid understanding of cap cost, money factors, and residuals and you'll be fine.
How much do you drive each year?
How well do you take care of the cars you've had?
How long would you like to keep it?
Leasing imposes strict mileage limits, and you get charged for damage to the car at the end of the lease.
I lease because I have car ADD and like a new ride every three years.
My wife bought her car as she plans to keep it for a very long time.
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2015 Subaru Outback 3.6R / 2024 Kia Sportage Hybrid SX Prestige
The negotiated price, acquisition fee, and any other costs, like registration, is the capitalized amount.
The residual is set by the leasing company.
The money factor is simply the interest rate. To convert, divide the money factor by 2,400 for the approximate interest rate.
Regarding the potential to over run the miles. Many leasing companies allow you to buy extra miles. BMW, for example, allows you to buy a $.20 a mile.
When you lease, you commit to the number of lease payments, miles, and reasonable condition.
However, with a lease you have alternatives.
For example, you can trade the leased vehicle at any time.
You can sell the leased vehicle at any time.
You can buy the vehicle at any time.
At any point in time, if you trade, sell, or buy, you will have to pay the amount of the residual value plus remaining payments.
To calculate your lease payment.
1. Subtract the residual value (a percentage of the MSRP) from the capitalized cost. Divide by the number of months of the lease. This is the first part of the payment.
2. Add the residual value plus the capitalized cost. Multiple by the money factor. This is the second part of the payment.
Add the two results from 1 and 2 above for the lease payment.
Knowing this calculation will make sure the dealer does not pull a fast one.
Good luck.