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Fee-only
Financial
Planning

The GOLD Company does not sell any products and is compensated ONLY from the company's clients. No commissions are taken on any products.

I sincerely enjoy meeting people and getting to know them. The Gold Company strives to return calls promptly and takes a genuine interest in your needs. I work hard to personalize a plan that best fits your needs, budget and future.

The Money Prof

Friday, August 1 2014

Cars - Should I buy or lease?

Years ago, leasing a car for personal use was always considered a poor choice. Even today, if you put on many miles during the year (let's say over 18,000) or like to own a car for more than 3 years, leasing would probably not be a good option. If however, you are looking for a way to defer the purchase of a car and reduce monthly payments (versus taking out a loan), leasing may be a very viable option. The best cars to lease are those that do not depreciate much over the lease period. That is why, cars such as Hondas and Camrys have been excellent leasing vehicles. The cost of a lease includes the invoice price that is paid for the vehicle, the amount the car depreciates, the interest factor and the number of miles allowed over the lease term. Here is an example of a buy or lease situation.

Purchase Option
Car sticker price$19,500
Downpayment$2,000
Loan$17,000
Loan terms - 3 years; 4% interest rate (this rate varies).
Monthly payment $501
Total Paid for car would be $2,000 + $18,036 ($501 x 36 months) = $20,036.



Lease Option
Car sticker price$19,500
Downpayment$3,000
Monthly Payment$119
Residual Value (Price that car can be purchased after lease term) $11,500
Total Paid for car would be $3,000 + $4,284 ($119 x 36 months) + $11,500 = $18,784.


The above illustration is only a rough example of how someone can defer the purchase of a car and have lower monthly payments. If the residual price would have to be financed after three years of leasing, then the overall lease cost would rise. One drawback of leasing is that once you sign the paperwork and begin leasing, it is virtually impossible to get out of a lease without taking a very big loss.

The GOLD COMPANY will help you achieve financial well being.

Offering the following services:
  • Investment Portfolio Assessment

  • Portfolio Development

  • Securities Portfolio Management

  • Retirement Planning

  • Insurance/Risk Management Review

  • College Planning

  • Real Estate

  • Estate Planning

  • Business Analysis

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Portland ME 04101
207-650-7884
moneyprof.oob@gmail.com
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Boynton Beach, FL 33437
561 894-8436
moneyprof.oob@gmail.com