buying cars Guides

Money is Debt: The Money Factor

The money factor is used during calculating the monthly lease payments and is a type of APR (Annual Percentage Rate) which is basically a part of the profit of the financer. The money factor can be derived by using a simple mathematical formula that may give shape to a complicated albeit feasible vehicle lease contract. Usually given in decimal form, for instance, 0.0030, it is equivalent to a certain monthly interest rate and a specific amount of APR.

Calculating Lease Payments

Leasing an automobile or car can be a very good option; especially for small businesses and for people who want to try out new vehicles without paying exorbitant prices. However, there are many factors to be considered before leasing a vehicle in order to ensure that the contract works in your favor. Some factors that may affect the financial feasibility of leasing include, driving record, distance commuted (if any), the type of car and the capacity to pay.

8 Advantages of Leasing a Car

Vehicle leasing or car leasing is the lease of a vehicle for a short period of time and has some unique advantages compared to an outright purchase. The decision of leasing or buying a vehicle completely depends on the buying entity?s needs and attitude. For instance, a company can lease a vehicle or car for its employees and save money and can also prepare a fleet of vehicles due to lower payments and bulk lease orders. However, a person who is trying to make ends meet may not be a good candidate for leasing. Here are some apparent advantages of leasing compared to buying a vehicle.

5 Disadvantages of Leasing a Car

Leasing can be a very good and economical method of driving a vehicle that is coveted and is seemingly impossible to buy. This is because if a lease works out well then it may be in the interest of the consumer financially or otherwise. However, there are many drawbacks if certain situations arise which are not predictable. In these situations a lease can become a burden and even affect your credit rating in an adverse manner. Here are some disadvantages of leasing that may help you in deciding whether to lease a vehicle or choose an outright purchase.