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(57)Buying versus Leasing A Car

         

If you are considering whether to buy or perhaps lease your next car and which would afford you the best deal, most consumer experts agree that from a purely financial aspect you will be better off in buying your next car.

Of course paying cash in full is the best possible scenario since with this option you would avoid any type of finance charge. But for the vast majority of us and for the scope of this article we'll take a look those purchases or leases that involve financing.

In the short term leasing may look attractive to you because monthly lease payments will more than likely be less than the monthly payments of a purchase agreement. Why? Because with a lease you are essentially only paying for the part of the car you are going to use. It's kind of like splitting the cost of a pizza with someone. You are only paying for the pieces that you are going to eat. In car terminology the part that is left over in a lease is called the residual value of the car. The higher the residual value of the car the less of the car you will use during the lease so you payments for the part that you do use (the lease) will be lower.

Typically lease durations are 24, 36, or 48 months. Do not sign up for a lease beyond 48 months. Actually anything beyond 36 months is pushing the value of the lease. Don't let the car salesman get you into a longer lease just because they make your monthly payments look more attractive. Remember time costs you money and the car's residual value will plummet and you loose all the advantages of leasing and still be left with nothing in the end.

For some drivers the car buying decision isn't based purely on bottom line numbers. And this is fine. It's strictly personal. Leasing does afford you the ability to always be driving a new car. A car that is within a few years of the latest body style and technology. A car that is always under the factory warranty. For the person that has accepted the fact that they enjoy being in a newer car and that car payments is just another monthly expense, then why not get the most car for the money? Then leasing could be a good alternative.

If this is your personal preference the other two questions you must answer are how many miles a year do I drive and how hard on cars am I? The mileage question can really come back to haunt you if you are not careful. People who are in new cars and thus enjoy driving them and showing them off more will have a tendency to drive them more. Be very careful with you mileage. Going over your allotted mileage on your lease could end up costing anywhere from 15 to 30 cents per mile beyond the lease mileage allowance and this can get painful in a hurry. In most leases you can purchase additional mileage up front at the time of the lease but keep in mind if at the end of your lease you haven't used all of your miles, you don't get that money refunded back to you.

I mentioned a bit earlier you need to consider how well you treat your cars. Only you will know this and you need to be honest with this one. Don't think that you can turn your lease car in at the end of the lease with the car in sub par condition. If you do, you may be assessed reconditioning fees that could become rather hefty.

In summary, from a purely financial perspective buying your next new car is the best over the long haul. But, with car ownership, so much personal preference, and personal priorities come into play. If you think leases look attractive, be absolutely certain about your mileage you will drive. Take good care of the car. And finally check with your insurance agent first to make sure that you don't give back the money you save in monthly payments to your insurance company.


About the author:

Jeff Neilan worked for many years in the automotive industry as a salesman, finance manager, new and used car manager, and general sales manager. With Jeff's working knowledge of car dealerships, car sales, and financing you'll find his articles on getting your best car deal insightful and rewarding when purchasing your next car. Please visit http://www.acarbuyersguide.com for more of Jeff's articles.

Written by: Jeff Neilan

(58)Can you really get a free car?.

Can you really get a free car?

You may have heard rumours that you can get a free car. Well, this is not exactly true.


As the old adage goes, you can't get something for nothing and this holds true in this case.

You can however ALMOST get a free car.

Why do I say almost?

Because you are going to put your car in a job!

That's right!

Advertising companies are willing to employ your car to display logos, signs and almost any sort of fluffy toy that suits their marketing campaign.

You see, advertising space has become very crowded and advertisers in their wisdom have worked out that people actually pay attention when they are driving.

Otherwise they will crash. Now that's not rocket science is it?

Well, if you know anything about advertising you will realise that the first step of the Ultimate Advertising Mantra is.

ATTENTION.

And so we have the perfect advertising medium.

So yes it's true, they will pay you and in some cases you can actually cover your loan repayments, which means in effect.

You are getting a free car.

For even more fantastic, fresh and dynamite car tips grab a free copy of my ebook and send it to your friends or give it away from your website.
 

About the Author

Graeme J. Sprigge is the author of 28 Dynamite Money-Making & Money-Saving Cartips - a free ebook which explores every nook of money saving and some money making ideas with cars. You can get it here. http://www.90minutecarsalesman.com/28cartipsdownload.html

Copyright 2009 Graeme Sprigge

Written by: Graeme J. Sprigge


(59)Can You Write-off Your Car as a Tax Deduction? Maybe...

 

You've heard it a hundred times: That shiny new car your buddy just bought? It doesn't really cost him anything. He writes off the car as a tax deduction.

Your first thought is usually, "That can't be right." Your second thought is, 'I got to figure out how to enjoy that loophole."

But what does the law say? And what are the rules for writing off vehicles? It turns out that you can write off the cost of buying and using a car if you're self-employed and use your vehicle in your business. Specifically, you can probably deduct the business portion of your vehicle expenses on your business tax return.

But this deduction is trickier than most people realize. Here's the first big thing that goofs many people up. You need substantiation to prove your business use. Ideally, in fact, the Internal Revenue Service wants you to keep a log of your business miles, your commuting miles, and your personal miles.

With this information, you can then either deduct an amount equal to the business miles times a standard per-mile rate of roughly $.35 or $.40 a mile (depending on the year)... or you can deduct the percentage of your vehicle expenses equal to the percentage that your business miles represent.

Note that only your business miles--and not your commuting miles or personal miles are deductible.

For example, if your business use equals 5,000 miles, personal use equals 3000, and commuting equals 2009 miles, your total miles for the year equal 10,000. Business miles as a percentage of total miles equal 50% because 5,000 divided by 10,000 equals .5 or 50%.

In this example, you could therefore deduct 50% of your fuel, 50% of your insurance, 50% of your maintenance and repairs, 50% of the car loan interest, 50% of the depreciation, and so on, as a business deduction. This means you can't ever deduct all the costs of owning and running vehicle--only the business use of a vehicle.

If you don't have exact records about your business use, you can sometimes use good sampling. For example, if you keep a good appointment calendar of your business activities, one popular tax reference suggests that you can look at the total business, personal and commuting miles driven during one week each month. Then, you can average this data to get good weekly estimates of your business, personal, and commuting miles. Finally, you can multiple these weekly estimates by 52 (the number of weeks in a year) to get reasonable estimates of your business, personal and commuting miles.

Spray Paint Secrets Video Banner But before you go out and buy a new luxury auto, you need to know there's another complication. Congress limits in most cases the amount of depreciation or lease rental that you can include in your vehicle expense calculations. The rules are a bit tricky, but essentially, for purposes of vehicle depreciation and lease payments, you only get to look at the first $17,000 (roughly) of vehicle cost. In other words, if you buy a $60,000 vehicle and your friend buys a $15,000 vehicle, you may both have the same business depreciation expense--even though your vehicle costs four times what your friend's does.

One other related point: You may have heard about the sport utility vehicle loophole. This SUV loophole really does exist. Specifically, the luxury auto limits mentioned above don't apply to sport utility vehicles that weigh more than 6,000 lbs. Note that Congress partially closed that loophole in 2009, however, by saying that a special, super-accelerated form of depreciation called Sec. 179 depreciation can't be used to write off all of the cost of an expensive SUV in the year the vehicle is purchased.


About the author:

Redmond WA CPA & author Stephen L. Nelson is an adjunct tax professor for Golden Gate University's graduate tax school.

Written by: Stephen L. Nelson, CPA


.(60)Car Accident Checklist: Are You Prepared?

 

I've got a confession to make. I've been in a car accident before. Granted, it wasn't my fault at all (both my opinion and the insurance company's opinion). However, once it happened, I realized that I should have been better prepared for the car accident the day it happened. Since I realized this, I decided to make a checklist for things to have in case of a car accident. Here we go

1)Insurance Papers. Make sure you have your insurance papers ready to give to the other party in case they need to see them. These can also come in handy to give to the Police if they arrive on the scene of the accident. In some states, having car insurance is mandatory for the operation of a motor vehicle and you can be fined if you don't have any insurance. Make sure you insurance paperwork is in order before finding out that it is necessary to have.

2)Pen and paper. Guess what? Most people (myself included until recently) don't carry around the necessary equipment in order to write down the other party's information for insurance claim purposes. Make sure you buy some pens that actually have ink in them and some decent paper in order to write the driver's information. Stow these handy items in your glove box and you'll be ready.

3)Digital camera or cell phone camera. This can come in quite handy in the case of a disagreement of facts over what happened at an accident. After the accident happens, taking a few snap shots of both your vehicle and the other driver's vehicle can be great evidence if there is a trial or if either insurance agency tries to deny responsibility. A lot of the newest cell phones come equipped with cameras inside of them that can take and store a huge amount of digital camera photos. Use your cell phone camera to take some on the scene snap shots. There are a whole bunch of other important tips to keep in mind that make these look like the tip of the iceberg. Learn them all and you'll be prepared.

About the author:

Amy Metz is author of "Top Car Accident Tips." Grab your copy at http://www.caraccidentlowdown.com.



Written by: Amy Metz


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