See Hattiesburg From Your Auto Rental.
Hattiesburg Has A Wide Selection Of Auto Rental Services.
Leasing cars gains popularity
Author: Ginger Thomas; Staff
Article Text:
Consumers drive newer cars for less money
By Ginger Thomas
AMERICAN Staff Writer
Consumers in the market for a new car might want to look at the advantages and disadvantages of leasing as well as colors and option packages.
More and more people are leasing vehicles these days with the price of vehicles going "out the roof," said John Parker of Courtesy Ford. About 60 to 70 percent of his customers opt to lease new vehicles rather than buy.
You get a lot more vehicle for your money when you lease," said Billy Miller, Mitsubishi sales manager for Ryan Motors in Hattiesburg. A customer who leases can get a nicer vehicle for a shorter period of time, and then he or she can turn the car in and get a new one at the end of the lease. The car usually stays under warranty throughout the lease period.
Businesses lease cars
Individual customers like to lease because monthly payments are lower, with savings of up to $100 a month, Miller said. Companies frequently lease business cars because some or all of the cost is tax deductible.
The lessee also does not have to worry about getting stuck with a car he cannot sell. "You have a guarantee that someone will take the car back," said Richie Eure, sales and leasing representative at Toyota of Hattiesburg.
The consumer's circumstances determine whether he or she is a good candidate for leasing, Parker said. Leasing appeals to customers who like to trade in vehicles every few years and keep up with the newer models and are used to monthly car payments.
Three options
"It's almost inevitable that people are going to have a car note," Miller said. But if they lease, they can set up a shorter term agreement, and at the end of the term, they can turn in the vehicle and get a new one.
Consumers have three options at the end of the lease, Parker said. They can turn the vehicle in, shake hands and leave turn it in and get another one or purchase that vehicle and keep it.
"It's kind of like renting a house," said insurance agent Bill Van Huss, who leases his business car for tax purposes. "You pay the money, but once the lease is up, you don't have anything (unless you decide to buy)."
The mileage limit can be a disadvantage for a driver who drives more than 15,000 miles per year, the standard lease limit.
Angela Boyd of Waynesboro said she plans to buy a new car rather than lease because she knows she will be driving more miles than most leases allow.
"If I didn't drive a lot of miles, I probably would consider leasing because I would love to drive a new car every few years," Boyd said.
If the customer goes over the mileage limit, he or she has to pay for the extra mileage, usually 15 or 20 cents a mile.
But the mileage charge is not a penalty, Parker said. "If the depreciation is based on 15,000 miles a year, it's just that the terms of the lease depreciated more than you thought it would. When you lease, you're only paying for the depreciation."
The customer is charged for any damage to the car. Abuses to the vehicle and/or an excessive amount of miles driven over the set limit, can get the customer in hot water.
"You can end up `upside down in your car,' owing more than the car is worth (after the lease ends)," said Charles Cullefer, lease coordinator at Petro Automotive Group.
Boyd said that she knows people who have found themselves in that situation. "Everyone I've talked to that has leased said they would never do it again."
Rapid depreciation is the biggest downside to buying a vehicle, Cullefer said.
Vehicles depreciate so much, it could take three to four years to reach a break-even situation when consumers buy an automobile. But as an advantage, they build up equity in the vehicle.
"Eventually you do own the vehicle, but by the time you own it, you need another vehicle," Parker said.
To lease or buy
The monthly note for a four-door 2000 Ford Taurus financed at 3.9 percent interest for 36 months is $625.08, according to John Parker at Courtesy Ford. Leasing the same car, with no money down, for three years would cost $423.09 per month.
JOE LOVETT Hattiesburg AMERICAN
Angela Boyd talks to Toyota of Hattiesburg salesman Richie Eure about the advantages and disadvantages of leasing.
Copyright (c) Hattiesburg American. All rights reserved. Reproduced with the permission of Gannett Co., Inc. by NewsBank, inc.
