Introduction to Leasing

By now, everyone is familiar with the concept of leasing. But did you know that over one half of the vehicles on the road today are being leased rather than owned by their primary drivers? This should come as no surprise. With the average new car price bounding past $20,000, most people have become more comfortable with the idea of not actually owning the vehicle on which they are making payments. After all, some new car loans extend beyond five years and the bank holds title for that entire time. This issue will look at leasing of automobiles and other business assets and explain some of the issues and terminology that pertain to this important area of commerce.

Take this Simple Test and Discover If You’re A Candidate for Leasing

1) my financial life is....

a) stable and likely to remain that way
b) occasionally bumpy but overall steady
c) chaotic and unpredictable

2) it’s important to me....

a) to drive a new vehicle every few years
b) to have a car that fits my financial circumstances
c) to be free of car payments once and for all

3) my "normal" driving consists of....

a) a short commute
b) running around town with occasional longer trips
c) racking up more kilometres than a long distance trucker

4) auto repairs are....

a) infuriating and I would do anything to avoid them
b) bearable if not too expensive
c) cheaper than buying a new car

5) for me "car care" consists of....

a) giving my car the royal treatment at the first sign of any trouble
b) following the manufacturer s warranty
c) waiting until the car stops running before visiting a garage

6) I consider my vehicle....

a) to be hot and trendy
b) to have four wheels, a motor and seats
c) to be a friend that will be treasured for many years to come

Award yourself one point for each a) that you chose, zero points for each b) that you selected and subtract one point from your total for each c) that pertains to you. If you score 5 or more, leasing appears to be a worthwhile option for you to consider. . .if you score between -4 and 4 you would probably be happy with either buying or leasing your next vehicle, but you should go over your answers and see which factors are the most important to you.. .and if you score -5 or lower, then purchasing your next vehicle is probably the best route for you.