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NATALIE SEBER: Automobile Leasing vs. Purchasing 101

While shopping for a new car, many people find themselves facing the same question: Should I buy or should I lease? To start moving toward an informed answer, first ask yourself “What do I want out of this vehicle, and how will I be using it?”

If you are a high mileage driver (i.e., 15,000 miles per year or more), then purchasing may make more sense. If you drive more miles than a lease allots, there can and will be hefty penalties. Most leases charge about 25 cents per mile for exceeding the annual mileage limit. As you can imagine, that adds up quickly!

 If you answered by saying “I just want a new car every few years with a low monthly payment, maybe even one that I wouldn’t normally be able to afford,” then a lease might be for you. The monthly payment is lower than that of a loan because the lender uses the residual value (the depreciated value of your vehicle at the end of your lease term) to calculate your payment. The warranty on a leased vehicle is the same as a new car warranty (typically, 3 years/36,000 miles of bumper-to-bumper coverage, but up to 6 years/72,000 miles).  Your monthly payment, insurance and gas should generally be your only expenses; read the lease agreement carefully for information about “excess wear and tear” that might be charged at the lease’s end.

If you do think about signing a lease agreement, remember that getting out before the normal lease term ends is close to impossible without losing some money. Think ahead about the next few years of your life. If you’re not in a super stable job and there’s a possibility that your income could fall in the next few years, or if you and your partner have considered divorce, then it may be a good idea to stay away from a lease agreement.

If you find yourself stuck in a lease agreement, there are, however, a couple of ways to get out of them.  You can sublet your contract, or you can purchase the vehicle with the plan to immediately sell it. For most people, the second option means taking out a loan to cover the period from purchase to sale, and that comes with its own fees.

Subletting your contract involves using a website such as that facilitates lease transfers online through a marketplace. Of course, there can be many fees associated with this process, so always read the fine print on any contract that you’re signing so that you know exactly what you will be charged. charges a nominal fee to list the lease and facilitate the transfer, but there are also fees charged by the original leasing company, like credit application and transfer fees. Each leasing company has its own fee structure, and they can vary broadly. You can find many of them listed here: Keep in mind that licensing and registration fees apply to lease transactions just as they do to outright purchases; sales taxes may also apply, depending on the state in which you reside.

Feel free to reach out and contact us if you need further assistance in weighing out your options. We are here to help however we can!

Natalie Seber

Associate Financial Planner

Starks Financial Group, Inc.

440 Montford Ave.

Asheville, NC 28801



Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.

[1] White, J. (2019, October 21). Personal interview.

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We are a one-of-a-kind magazine that provides local, regional, national and international information about women’s lives and education, performing and visual arts and writing, the environment, green living and sustainability and regional Western North Carolina business, people and events. “Villages preserve culture: dress, food and dance are a few examples. As villages grow in population and turn into towns, local cafes make way for large American chains. Handmade leather sandals are discarded for a pair of Western sneakers. Due to its small size, a village fosters a tight-knit sense of community. explains the meaning of the African proverb, “It takes a village,” by stating that a sense of community is critical to maintaining a healthy society. Village members hold a wealth of information regarding their heritage: they know about the ancient traditions, methods of production and the resources of the land. When villages become dispersed or exterminated in times of war, this anthropological knowledge disappears. Large cities are not as conducive to growing and producing foods such as fruits and vegetables. Villages, on the other hand, usually have ample amounts of land and other resources necessary for growing conditions.” The Importance of Villages by Catherine Capozzi Our Mission provides readers with information important to women’s lives and well-being. We focus primarily on the areas of education & health, business & finance, the arts & the environment. We are particularly interested in local & regional resources, organizations & events.

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