Since the option of leasing a new automobile became a reality there have been many arguments over whether it is car-leasebetter to lease or buy a new vehicle. There are many benefits available to people considering leasing their next vehicle however leasing is not the best option for everyone. Before you lease a vehicle you should ask yourself the following questions to see if leasing is the right option for you.

Do You Understand What Leasing Entails?

While many people are attracted to the lower monthly payment a lease generally offers you should understand the difference between leasing and buying before you commit. Leasing and purchasing loans are just two different options to finance an automobile. When you lease a vehicle you are paying for the use of the vehicle versus making payments toward owning the vehicle, each with their own benefits and drawbacks depending on your situation.

Do You Drive More Than 15,000 Miles Per Year?

Your new car lease will limit the number of miles you can drive each year. If you exceed this number (normally between 10,000-15,000 miles) you will be charge for excess miles.

Do You Maintain Your Vehicles?

When you buy a vehicle it is yours to do with as you wish. If you fail to maintain your vehicle mechanically or cosmetically that is your choice, however if you are leasing a vehicle your contract will require the vehicle be returned with no more than “normal” wear and tear.

Do You Have A Stable Income?

Regardless of your choice to lease or buy you should have confidence in your ability to repay your financial obligations. If you are unable to pay your lease payments you will be hit with early termination fees and all remaining payments. Before you consider purchasing or leasing a vehicle you should have a stable lifestyle and steady income to reduce the risk of defaulting on your loan.

Recent Changes To Leasing Contracts

You’ve decided the benefits of leasing make that option of financing right for your situation. Before you rush out to get your new car you should be aware that recent changes in the automobile industry will limit your options. Chrysler Financial no longer offers leasing options and GMAC Financial Services has reduced the number of leasing contracts. Ford Credit still offers leasing but has cut back as well. For the companies that are still offering leasing the payments have risen by roughly fifty dollars per month for cars and two hundred dollars per month on larger sports utility vehicles.

It would seem that leasing may see a decrease in popularity during the current economy however if leasing is the best option for your automobile needs you can still take advantage of the many benefits it offers.