How To Determine If You Should Lease Or Buy A New Car

It is only normal for people to want to save money, and in terms of acquiring a new car, one of the most common questions is whether or not one should buy a new car or lease one. There are all kinds of experts out there who say one way or the other is “always” the right answer, but the problem is that their “right answers” fall on both sides of that fence.

The real answer is that it depends on you and what you want to accomplish, as well as your car habits. For car habits, we are referring to how often you get a new car. Do you get a new car once every couple of years, or only when the wheels fall off the previous one? If you always need to have a late model car and don’t care that it really never gets paid off, then leasing is probably a better option for you.

How many miles do you typically drive over the course of a year? If you are a traveling salesman or a tech support person covering a large geographic area, meaning you put a lot of miles on your car, then leasing is almost certainly not your best option. Leasing programs are getting more flexible these days, allowing you to specify how many miles you will drive over the course of your lease, but if it works out to be much more than the standard 12,000 miles per year, you will probably find that the cost of leasing actually exceeds the cost of buying a new car.

Look at it like this. On a lease, the dealer needs to figure out what he can sell the car for at the end of your lease period, say two years. At 12k miles per year, a two year old car with only 24k miles on it will still demand a decent price if it’s in good shape, and allow the dealer to make a reasonable profit on the sale. But that same two year old car with 50k miles on it is going to sell for considerably less because of the much higher mileage, and your lease payments will reflect the fact that the value of that vehicle is going to be less, and YOU will be paying the difference in your lease payments.

With a lease, you never build up any equity in the car. It is like having a permanent car payment. Yes, at the end of the lease you can buy the car, but at that point you could probably get a better deal on a better used car, so that is an option that very few people take advantage of. On a lease, you still pay for insurance, tires, oil changes, and all the other stuff that you would pay for if you owned the car. In fact, you will always need to carry full insurance coverage on the car, whereas you can drop the expensive collision insurance on a car that you own after you have paid it off.

On the other hand, if you are using the car for business purposes, a lease will provide you with a bigger tax write-off than a purchase, generally speaking. Also with leasing, your monthly payment will typically be less, depending of course on the model of car you choose.

If your credit rating is less than stellar, you may wish to consider purchasing instead. While you can find car loan programs for people with average credit and even bad credit, it is much more difficult to find a good lease program for people with less than good credit because the risk to the dealer and manufacturer is greater.

You need to do your homework and determine which is the best way to go based on your driving habits and car ownership habits. There is no right answer that fits all people, so make the informed decision that is right for you.

Guaranteed Auto Credit From Auto Net Credit Centers

Presently, there are many Auto Net Credit Centers that auto finance endorsements from instant Easy Credit Auto marts in the USA. Now you can even get an okay for Instant Car Loans from banks, credit unions and even from any local auto mart even if you have a poor credit balance. After completion of the auto loan endorsement, an agent from the department will immediately process your request. The representative will then contact you and discuss what you need to settle on which car loan option is suited best for your circumstances.

Easy Credit Auto sales are meant for people who face credit problems that do not meet the criteria for loans from banks and credit unions. This online car loan application is completely secure and if anyone is planning for a car loan, these auto credit centers are the right place as they have made it easy for anyone in the United States with credit problems to buy a car. There are many reasonable auto credit loan choices for consumers with fair, poor, no, slow and low credit scores.

An instant credit approval depends on what information the applicant submits online. All information, for example where employed and salary has to be verified. The applicant should be as precise as possible while completing the online easy credit application form. If any part of the information submitted in the application does not match with what is verified, the instant car loan authorization will be annulled.

So if the salary, employment and all other information submitted is correct after verification, the guarantee of the car loan will be approved. All approvals are based on what is affordable on a monthly basis. Money down will be required if the car that is bought is more than the approval amount.

While applying for a Guaranteed Car Finance agreement, the applicant should set realistic expectations like selecting the right car, as this is the most vital part in getting a Guaranteed Car Finance loan approved. As soon as the auto mart sets a financial plan for the applicant, they usually give the nominee a choice of three or more cars. Once the selected applicant picks a particular car, he/she should have it thoroughly checked by an ASE Certified Master Mechanic.

The next immediate thing to reflect on is the Guaranteed Auto Credit as the loan term should preferably be kept as short as possible. If there is enough space in your budget once you’ve cut down on the term, consider the purchase of GAP insurance and/or an extended warranty to cover the length of the financing contract. In particular, the first auto loan with poor credit will have the interest rate quite high, so the shorter the term is kept, the less the interest paid.

So now with so many Auto Net Credit Centers an easy auto loan approval online is easily available. This premier EZ application will take just a minute to complete. All information submitted by the consumer is kept completely private and guaranteed secure.

Auto Repossession Before Bankruptcy

The other day I received a call where an individual asked me whether filing bankruptcy would allow for a car that has been repossessed to be returned. Although my response probably failed to satisfy the caller (the usual attorney response of it depends), here is what is required in California (at least how the courts have viewed the law).

Background

In most vehicle contracts the lender retains a right to repossess a vehicle if the borrower fails to make the scheduled payments. With many contracts, this repossession can be done outside of any court proceedings.

However, once an individual files for bankruptcy many of the rules change. For one, an automatic stay is implemented. This stay prevents most actions against the debtor (individual that files for bankruptcy). Specifically, the automatic stay strictly prohibits any lawsuit or repossession against a debtor that is delinquent on car loan payments. Any repossession after a bankruptcy petition is filed constitutes a violation of the automatic stay, with the repossession void and of no effect. In that case, the lender would be immediately required to return the vehicle to the debtor.

Effect of Bankruptcy on Prepetition Repossession

Section 542 of the Bankruptcy Code requires that entities in possession of “property of the bankruptcy estate” are generally required to turn the property over to either the trustee (in Chapter 7) or the debtor (in Chapter 13). This big sticking point then for this turnover requirement is determining what is “property of the estate.”

Section 541 of the Bankruptcy Code defines property of the estate. This definition includes “all legal or equitable interests of the debtor in possession as of the commencement of the case.” Basically this definition states that whatever rights the debtor has at the commencement of the case continue in bankruptcy. As for the vehicle that has been repossessed, the court has to discover what rights a debtor had when the bankruptcy case was filed.

These rights are determine by state law (California State law). Under the California Civil Code (section 2983.2), a debtor has the right to redeem a repossessed vehicle up until the date the car is sold by the repossessing lender.

Two recent cases have come to different conclusions as to whether turnover of the vehicle is required upon the filing of the bankruptcy petition. First, in a case from the Southern District of California (In re: Fitch, 1998), the bankruptcy court held that while a repossessed car is property of the estate, the right to possess the car was transferred to the lender prior to the filing of the bankruptcy petition. The court interpreted the statutes to mean that the automatic stay freezes the positions of the debtor and creditors. Thus, the lender had the right to maintain possession. The court did state that a vehicle could be returned to a debtor upon the debtor’s giving of adequate protection. In most cases adequate protection means the establishing of proof of insurance and proof that the debtor will be able to make the regular payments on the car.

In the Northern District of California (In re: Cortez, 2010), the Bankruptcy Court interpreted the Bankruptcy Code, and specifically the section on the automatic stay, to mean that a “knowing retention of estate property violates… the automatic stay.” Because a debtor has the right to redeem until the date of a sale by the lender, the vehicle remains part of the estate, and subject to turnover. In this case, the debtor provided adequate protection to the secured creditor. However, the court seemed to say that it was not necessary for turnover.

What to do?

If your car has been repossessed, and you want to make sure you retain possession, bankruptcy may be a solution if you are not able to pay the balance before a lender’s sale. However, while the Northern District seemed to state that adequate assurance is not necessary for turnover, it will ultimately be necessary to avoid a lender’s motion for relief from the automatic stay. Be prepared to show (a) insurance, (b) regular and sufficient income, and (c) an ability to pay for the vehicle.