Automotive News

Posts Tagged ‘asset’

Is leasing a car, rather than purchasing a car on time payments a good thing or not. As with questions in life, it all depends on your financial and/ or automotive situation and as well who tells the story.

It is true that business can write off lease costs whereas that is not such an advantage to an individual car user. However this is not necessarily so. First it all depends on your situation and as well you’re negotiating skills. It is always better to be in an informed and prepared manner.

First of all leasing a car is downright attractive due to current low interest rates. Almost every month you will read in the popular news that the “Fed has cut interest rates again”. What this means to you is that in an overall sense that interest rates are less to you. This should mean lower leasing costs to you. If interest rates, in the banking industry and market are lower, so should be the interest rate basis in your lease negotiations and payments.

What are the advantages of leasing a vehicle? You will get a new vehicle to drive. When your leasing agreement term is over – then you hand the car in and walk away.

It may be debated that by leasing the car you will have no equity or asset accumulation left at this point in this automotive transaction. If you had bought the car, with payments, the car would be yours at some point, lock stock and barrel.

However major components and overall costs of running a car are maintenance costs. With a new vehicle – it is unlikely that you will incur these costs. First of all the car is new. Major repairs and costs are unlikely. In addition the car will come with a manufacturer’s warranty which should cover you for the majority if not all of the lease time period.

With modern, newer and especially smaller cars it seems that all repairs seem to be very expensive. After a certain point of time, use and mileage, it is not as if the car “nickel and dimes” you to death. Most of the innards of modern cars seem to be electronic in nature with advanced (read expensive and hard to fix) modules. There are few simple to repair mechanically based, non electronic component, cars. In addition for mechanics to work on cars now “everything is struggle’ “and as well spaces are tight and very hard to work within. In a summary the old “nickels and dimes” are now “five hundreds, thousands and several thousands”. With a leased car arrangement you may not own the car, with its equity. Neither do you have repair costs and heartaches. In addition you have a reliable vehicle to get you to work or to chauffer around your family.

There are several terms and factors to be knowledgeable about in your calculations and comparisons for auto purchase versus lease workup and lease negotiations.

First of all research the leasing tax rules in your jurisdictions. For example in your state you may well only pay sales taxes on monthly payments, not on the cost of the vehicle. It all depends on the negotiations of your payments- which involve the time frame and value of the car at the take back time end of lease.

Next what are the fees? For example the fee at the end of turn in, paperwork fees and fees for “excess miles”. Are these negotiatiable? In the case of the “excess mileage” and “excess mileage fees” are these carved in stone or can the allotment or rates charged be reduced? In the case of the “turn in” fee. If you offer to increase your monthly payment – often this fee will be reduced.

In order to best negotiate you will have to speak the same language and terms as the lease negotiator. Several terms to know, comprehend and understand are “Capitalized Cost”, “Money Factor” and “Residual Value”.

Simply put the cost of the leased vehicle is confusingly described as the “Capitalized Cost”. Just as you would haggle over the cost of buying a new car, you should not accept a stated price or manufacturers suggested retail price (M.S.R.P.) as the price paid.

Haggle and argue over the “Capitalized Cost” just as you would in any car or automotive deal.

Next in line in proper automotive leasing terms is the term “Money Factor”. “Money Factor “is the interest rate upon which the leasing calculations are based upon. The lower the number of the “Money Factor”, the better for you. As a rough guide and estimate multiply the “Money Factor” value by 2550 to get an estimate of the relevant interest rate.

Last in the line of leasing and leasing lingo is the term “Residual Value”. “Residual Value” is the amount that the car, S.U.V. or truck vehicle is said to be worth at the end of the lease period. Simply put, the more the vehicle is deemed to be worth, at this time period, the less will be your total amount due to be paid overall for your lease. Thus the higher the “Residual Value” at the end of your lease, the much lower will be your monthly lease payments.

In the end, your car purchase or lease decision will come down to two factors. Reliability of transportation and the total cash outlay from your personal pocketbook or wallet.

The car is most probably the second most important asset of anybody, next to a house. Therefore, it is important that we give importance to its protection and security.

Automotives have been a natural target for burglars. They cost a lot of money, can easily be stolen and transported and may relatively be easy to resell.

Statistics show that 1 out 4 reported crimes are automotive-related. Out of all automotive crimes, 40% occur on the road just outside the house while 30% occur in public places, most often in parks. 40% of these stolen automotives are never recovered by the owners.

Most at risk are older car. New cars already come with appropriate automotive burglar alarm systems. Therefore, it is no wonder that more incidents of burglary occur on older automotives, accounting for almost 80% of all automotive-related crimes.

Due to these statistics, more and more people have realized the necessity of investing in car security measures. Majority of these people will not think twice in going for the more expensive automotive burglar alarm systems.

A less expensive security measure is with the use of steering bars or locks. However, these do not offer enough protection as these may be sawed off by determined and experienced burglars. The steering wheel can also be bent forcibly, making the steering bars or lock easily removable.

To provide more protection, a reliable car security alarm system should be installed. Millions of people have invested in expensive but sophisticated automotive burglar alarm systems. Why not? These have been proven effective in preventing automotive theft or stealing of valuable possessions left inside the vehicle.

How does an automotive alarm system work? Simply put, this is device with a bunch of sensors connected to an alarm. In its simplest form, the switch is placed on the driver?s door, which is then wired to an alarm. When the door is opened, the alarm then goes off.

The automotive burglar alarm systems nowadays are more complicated than this. Aside from simple sensors, they now include switches and even detect movement. This motion detector is why we often encounter alarms going off with just the slightest movement or with nearby noise. The type of alarm can also be chosen such that the sound is distinct and can easily be recognized by the owner even from afar. Modern automotive burglar alarm systems can also be wireless and can be controlled remotely and can also have a supplementary battery such that it still works even if main battery fails. All of these added features come with a price, but it is all worth it considering the added security and protection for a prized possession.

With the high incidence of car-related crimes, it is definitely worth the investment on modern automotive burglar alarm systems.