Leasing a Car Under $199: Does it Make Sense?
The allure low monthly payments and the prospect of driving a new car without paying the associated cash is genuinely enticing. Leasing, no doubt, is a popular concept in America where people love their cars and want to boast the latest features on their vehicles. But ever since 2007, car prices have risen exponentially while people’s income has remained flat. Thus, leasing stepped in to save the family budget without foregoing the wish to drive a new car.
Yet, the question remains, just because leasing is cheap in the short term, is it a feasible concept? Sure, you can lease a 2020 Ford Escape for under $199 per month, but is the deal as good in reality as it is on paper? The dilemma has sprouted its head owing to the recent sale of quality used cars by dealers in South Carolina as the possibility of owning a car almost always trumps leasing the same vehicle.
Decoding the under-$199 lease deal
Let us take the example of leasing a brand new 2020 Ford Escape. The MSRP of the vehicle is slated at around $24,900. Leasing the car will take you to spend $179 per month and you will have to sign a contract for 24 months. That equates to a total expense of $4,296 for leasing and driving the vehicle for 2 years. You will also have to pay a title fee, some security deposit and registration fees. In all, typically the amount due while signing will stand at $3,000.
Now, let’s compare it to a used 2015 Ford Escape. At the top auto dealership in Spartanburg, you will get the vehicle at around $12,000. That is equivalent to leasing the same vehicle just thrice and you get complete ownership. From another angle, the fees you pay for leasing sums up to stand at $1,296. You can buy the 2008 Escape with just $500 as down payment. Either way, you end up owning the asset value of the vehicle that is never yours when you lease.
Sensible or not?
The above analysis shows that on financial terms, leasing is rarely sensible. Plus, the terms attached to the lease agreement, like a cap on mileage, do not make the investment worthwhile. If you have $199 per month to spare, buy used cars from dealers who can help you to plan your finances to fit your budget. Opt for buy here pay here if you have poor credit or pick an older model. Own your car. Drive around with pride. There is seriously no feel of driving if the car is not yours, to begin with.
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