There’s a silver lining in every disaster, and that goes double for the 2009 new car market.
The Big Three automakers, General Motors (Stock Quote: GM), Ford (Stock Quote: F) and Chrysler, say that their January sales numbers are the lowest ever recorded. So all three, plus automakers in Europe and Asia, are offering some great deals on cars.
If you have a good credit score and can put 10% to 20% down, you can strike a deal that would make a Somalian pirate blush.
Should I Lease or Buy?
Times being tough, maybe you aren’t sure if you want to put your cash into some new wheels with long-term monthly loan payments. Perhaps you’d prefer to hedge your bets and opt for a lease.
There is a good case to be made for both. If you own, then you face the immediate prospect of depreciation, i.e., how much your shiny new car goes down in value the minute you drive it off the lot. There is also the argument that leasing leaves you with no equity and nothing to show for all those payments.
When making a lease or buy decision, do not just look at financial comparisons, but think about your own personal priorities. What do you want and need in a car?
1. Have you crunched the numbers?
Not sure whether you want to commit to the car for a long term? Break out the calculator. Use BankingMyWay's (Mainstreet's partner site) lease vs. buy calculator to crunch the numbers for you. If keeping your monthly payments down is most important to you, know that the short-term monthly cost of leasing is usually less than the cost of buying. (On average, monthly lease payments are 30% to 60% lower than loan payments for the same car, same down payment, etc.). This holds true even when compared to 0% or low-interest loans. Plus, in an ownership arrangement, auto dealers will likely require more money down than with a lease deal.
