sedan. Saturday , October 21st , 2017 - 12:39:59 PM
The reason a car leases monthly payment is so much less than the principal and interest payments on a car note is that the lessee is not amortizing the value of the car with the payment. The lessee is amortizing only the depreciation costs and paying interest to do so! As an example if the 3-year depreciation expense on a car $20,000 car is $10,000, the monthly payment on the lease is based on that 10K along with the interest rate. Sounds like a good deal, I suppose, until you figure in that the car dealer will get back a used car at the end of the lease that he intends to sell for the full value of its make and model. What this means is pristine physical condition and low mileage. If the car returns in anything other than perfect condition, the lessee will have to pay in the form of stiff mileage and wear and tear penalties. Lease a car back to back and you loose big time because you are always bearing the cost of someone elses depreciation.
In closing, its not inconceivable that consumers who purchased their cars last year might actually make money off of this depreciating product when selling it on todays market. At the same time many of my peers might find this article bizarre mainly because when they pass by their dealership they see no supply shortages sometimes. Remember when looking at the economy its not just your neighborhood, rather the whole country.
Honda Civic is a car that is noticed everywhere, some people avoid buying this car for the very same reason. Its attractive design and looks made it so appealing. Honda Civic has everything that a long-term car should have. It's affordable, simply designed, a practical car. Its aerodynamic structure and low air resistant design allows it to perform as good as 26/34mpg. With the rising price of fuel, it's obvious to have more cars like Honda Civic in the future.
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