Car Finance – Lease or Buy A New Car – How to Decide?
The truth is, that like anything the answer to “what is best?” depends on the car shopper’s needs and wants. Once these are determined, then he/she can apply some basic maths to determine whether or not buying or leasing is best.
The criteria you can use to decide which car finance is best can be answered using the following decision tree. NB-For this to work, you must truthfully answer each question based on the true definition of ‘need’ and ‘want’:
1. Do you need unlimited mileage? If yes, proceed no further and buy a car.
2. Do you need to own the car from the 1st day you drive it? If no, then go to the next question.
3. Do you need to obtain finance to obtain the car? If no, proceed no further and buy a car with cash.
4. Do you need a fixed monthly payment for finance that will not vary across a fixed period (3 – 5 years)? If yes then proceed to the next question.
If you have got through the above questions, then leasing is an option that could work out cheaper than buying. However, there are a few more questions that need to be answered based on your ‘wants’ (with question 6 being the biggest ‘want’ or ‘need’ of all):
5. Do you want to drive the best car that you can afford? By afford we mean the monthly payment on finance comfortably fits within your monthly budget without causing stress. If yes, leasing can often get you an ‘up market’ car (eg; Audi, Mini, BMW, Mercedes) for 30% of the price of buying a car on a loan.
6. What car do you want or need to drive?
Now that you have answered the above, the following is a rough and simple mathematical calculation that can tell you the benefit of leasing the car that you want or need versus buying a car.
What is critical to this is how much the car that you want to drive is likely to depreciate across the period that you want to drive or own the car. If we assume 3 years then you need to:
(i) Obtain the likely future value of the car after 3 years (you can get this from the AA website which states on average most cars depreciate 60% over 3 years);
(ii) Deduct the future value from the current retail price to obtain the ‘depreciation amount’;
(iii) Take the depreciation amount and use a car finance calculator and add 8.9% APR to get total lease payment then, divide this by 36 months to get the rough monthly payment for that car if you leased it.
Example Audi A4 costs £29,000 and assume it will depreciate 30% over 3 years = £8,700 (Audis are renowned for lower than average depreciation). Add 8.9% APR and monthly payments on a lease would be approximately £277.00 each month for 36 months. If you compare this to buying the Audi A4 on a personal loan on the same APR, you will have a monthly payment of £920.84 for 36 months. Therefore, the question for you now becomes, is the want of owning the Audi A4 worth an extra £643 per month? If you buy the car, across 3 years you will pay a total of £33,150 for an asset worth £20,300 that will also be out of warranty at the end of year 3.
Leasing compares really well for cars that have lower than average depreciation.
Five Tips For Determining Your Business Insurance Needs
There are several types of insurance you can acquire for your business. Choosing the right type is often difficult, but there are questions you can ask yourself that will help you when doing so. When you start a new business, one of your most basic needs is insurance. While many small business owners see this is an unaffordable option, it can save a business in the most crucial of times. At any given time, a disaster can strike, and when it does, you want to be well prepared. Since it’s lot easier to rebuild than it is to start from the ground up, your insurance becomes one of your most necessary acquisitions.
There are many types of business insurance, and the type you need can vary widely, depending on the type of business you own. This first means understanding your own business needs, and then how the type of insurance you choose will pertain to them. Below are five tips that will help you choose the proper type of insurance, and insure you have the right coverage.
KNOW YOUR INSURANCE REQUIREMENTS
By learning as much as you can about your business and the local requirements, you will be able to properly assess your insurance needs. Check with insurance agents in your area to get an estimate, and to learn of any state, bounty, or city requirements you might need to follow.
RESEARCH INSURANCE COVERAGE
By researching the various types of insurance coverage available, you will be better equipped to make a decision on what type will be right for your business. Because there are so many types, and because they work in different ways, this research can save you further difficulty on down the road.
INCORPORATE YOUR BUSINESS
While it is certainly not necessary to incorporate your business, and while you may prefer not to do so, it can actually benefit you where liability is concerned. While doing so requires more paper work then sole proprietorship, it does give you that added protection which you may appreciate in the long run.
INSURE YOUR BUSINESS AGAINST NATURAL DISASTERS
By purchasing insurance for your business that will cover natural disasters, or disasters such as fires or floods, you will protect yourself from having to completely rebuild should something like that occur. You can never be too careful, and it is important to keep such factors in mind.
DETERMINING YOUR COVERAGE
Any time you purchase insurance, no matter what type it is, one of the most common questions you ask yourself is how much coverage you actually need. While this can be hard to determine, it can be done by evaluating your needs and weighing them against what will happen if they aren’t insured and disaster strikes. There are many ways to do this, and your insurance agent can help you by answering any questions you may have, and pointing you in the right direction.
Finding Good Insurance Rates For Your Business
When you purchase insurance, you want to make sure you find the best rates for the appropriate coverage. It is a good idea to consult a local agent if you are unsure about how much coverage you need, and what are considered to be good rates.If you own a business, you are probably aware of the importance of purchasing insurance. There are several different types of insurance that help protect you against various problems and disasters that can occur.
Before purchasing insurance, it is a good idea to check with the particular state, county, and city in which you reside to be sure you are meeting any requirements that might exist for your area. This is important, as it varies from one location to another, and will be crucial should you ever need to file a claim.
One of the most important aspects of purchasing insurance is getting the best rates possible for your particular coverage. While you do want good coverage, and shouldn’t sacrifice it for uncharacteristically low rates, you also don’t want to pay more than is necessary for your insurance. There are ways to make sure you get good rates.
The first step you should take is to carefully research the coverage you will need. This means assessing your insurance needs and comparing them with the information you find that is specific to your type of business. This is especially important because different types of business will require different types of coverage. You may also need different types of policies for different companies as well, so you should research this carefully.
If you are seeking insurance rate information, contact a locally or nationally certified broker and request an industry specific quote. After all, you don’t want to purchase the wrong kind of insurance, and you won’t want more or less insurance than you actually need.
Such industry quotes can vary widely depending on the nature of the business and the type and amount of coverage you are requesting. If you are unsure about how much coverage you do need, contact a local agent. He or she can ask the right questions and will be able to give you estimates and general information. By assessing the situation further, you will then obtain more specific information that will help you in making a final decision.
If you are searching for general information, the Internet can also assist you in finding types of insurance and how they might pertain to your specific company. Before conducting any research, make sure you have a good understanding of what you need. If you are unsure, consult your insurance agent who will then help you in figuring this out. Remember, purchasing the right kind of insurance is crucial to the well being of your business on down the road.
Home Insurance – Buying Versus Renting
Whether you are buying or renting a home, it is essential that you purchase insurance. This will protect your belongings against disaster and theft.The decision to buy a new home is an important one. It is, perhaps, one of the biggest steps you will take toward making a financial investment on which you will actually see a return. Still, for various reasons, some people choose to rent. There is certainly nothing wrong with this, and both have several advantages.
When you buy a house, you are responsible for all of the up keep and repairs. When something goes wrong, you have to find someone to repair it, or take care of it yourself. When you rent, you enjoy the luxury of having this done for you, and are at the mercy of the owner who will hopefully feel it as important as you do.
When you buy a house, you are making an investment. If you own it long enough, and take good care of it, you will eventually see a return on your investment. A well cared for house will make you money should you decide to sell.
If you rent, however, you are not responsible for paying all of the interest and taxes that you are required to pay when you buy. You have a monthly rent payment that is very much like a monthly mortgage payment, but without the added expense. Insurance is also different for buyers than it is for renters.
Insurance is one of the most important investments you will ever make. Depending on your particular policy and the coverage you have chosen, it serves to protect you against various accidents, disasters, and thefts that could occur. Your plan may either be replacement or partial, but in either case, you won’t have to pay full price to repair or replace items.
Home owners insurance differs from renters insurance in several ways. First off, most home owners insurance policies cover the entire property. You can purchase additional policies to cover specific disasters such as hurricanes and earthquakes where relevant, and can purchase as much or as little coverage as you need. Home owners insurance covers both the interior and exterior of your property, along with all of the items you own as long as they are deemed insurable.
Renters insurance covers only your personal possessions. It does not cover the actual property on which you live. The owner will have already purchased policies to cover the interior and exterior of the home or apartment, so you will only be responsible for insuring your belongings. Renters insurance is also relatively cheap, so that you get good coverage at a very reasonable rate. Again, whether you receive full replacement or just partial replacement will depend on your particular policy.