What should consumers do?
Why
You Should Lease From A New Car Dealer
Until the past few years, most people
bought new cars through automobile dealer
financing, or bank loans or in rare
instances, straight cash. Leasing vehicles
was for business, not consumers.
"Today, all that has changed," says
Craig Riley, a new car dealer in Markham,
Ontario. "At our dealership alone, about
60 percent of our business is short
- term two - to three year leases for
typical consumers. And we expect that
percentage to grow."
Is leasing for you? There are many factors
to consider, but above all, Riley recommends
that if you decide to lease, be sure
to do it through a manufacturer's lease
arrangement available at a reputable
new car dealer.
"All members of the Toronto Automobile
Dealers Association offer manufacturers'
leases with full disclosure, where the
cost of borrowing, mileage restrictions,
the capitalized or actual cost of the
vehicle on which the lease rates are
based and the optional purchase price
at the end of the lease are completely
spelled out," Riley emphasizes.
Full disclosure enables prospective
buyers to compare the advantages and
drawbacks of a lease deal to a standard
financing arrangement.
"Keep in mind that typical leases today
tend to be for a shorter period of time
than financing arrangements: two to
three years compared to 48 or 60 months.
That is why before you even begin to
consider what is best for you, ask yourself
if you would rather amortize the vehicles
depreciation over a longer period of
time. Also, purchasing may be for you
if you like to own the same car for
a long period of time," he says.
Leasing, by contrast, is designed at
least in part for people who expect
lifestyle changes and like to trade
in a lot. They may also prefer the advantages
of driving a new vehicle under warranty,
and are attracted by a lower monthly
payment over a shorter period of time,
Riley says.
*
Article from MacLean's Magazine by,
Craig Riley, President, Markville Ford
Lincoln, TADA Member. |
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