Unity One Credit Union

Credit union informs: Destroying the myths of leasing

Mon, Jan 26, 2015 @ 01:20 PM / by Alyssa Guillory posted in FairLease, Buying a car, #FirstTimers, leasing a vehicle, Unity One Credit Union, first time car buyers

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shutterstock 194800994 smallYou probably have a good idea of the vehicle that you want to drive. Sometimes the hardest decision you have to make is which type of financing is right for you. Purchase or lease?

Our friends at Fairlease have provided the information below to help detroy the myths about leasing. 

Myth 1 - High mileage drivers should not lease. False! High mileage drivers can make great auto-leasing candidates! The number one way to depreciate the value of a vehicle is to drive high miles. That vehicle then becomes the most difficult vehicle to resell. Fairlease allows you to customize your lease agreement for over 15,000 miles a year so you won't have to worry about trading or reselling a high-mileage vehicle. 

Myth 2 - Wear, tear and mileage are penalties. False! Wear, tear and mileage expenses are an equalizer. When you agree to "lease" a vehicle from the the registered owner, the owner guarantees the residual value of the vehicle. If you drive more miles than agreed, you use more of the vehicle's worth, and therefore you will pay for those miles at lease end. If you own the car, you resell it for less and you still absorb the expense of the mileage and excess wear and tear. Whether you lease or own the vehicle, driving high miles or incurring excess wear and tear will affect the vehicle's value. 

Myth 3 - You don't own the car. True...but does that matter? In the lease relationship, the lessor owns the vehicle and you lease (or rent) the use of it. Therefore, at the end of your automobile lease term, the car is returned to the lessor who resells the vehicle. If you want to own the vehicle at the end of your finance term, you can continue to drive a used, depreciated vehicle or you can sell it yourself. You then own the depreciating asset and its value is worth far less than when you purchased the vehicle. 

Myth 4 - Automobile leasing is only for the wealthy. False! Automobile leasing is for anyone who has qualifying credit. You don't have to be wealthy to understand the value of leasing. Everyone has the same opportunity to minimize monthly expenses and maximize savings and investments. 

Myth 5 - Leasing requires more expensive insurance coverage. False! Many leasing companies may require higher limits of liability coverage causing your monthly insurance costs to rise. Not at Fairlease! We require the state minimums of liability, exactly like a conventional auto loan.

Ready to lease a new or used car?
Get a Quote! 

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Tips for First Time Car Buyers!

Wed, Jun 20, 2012 @ 08:51 AM / by Erayne Hill posted in credit unions, loans, first time car buyers, first time car buyer

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first time car buyer
It doesn't matter whether you’re a recent grad with your first real job or someone other than the typical first time car buyer, the car-buying process can be filled with an enormous amount of uncertainty. Check out these tips for some help:

Know what you can spend monthly. Do not purchase more car than you can afford. A good rule of thumb for first time car buyers is to add up all of your monthly debts and divide it into your monthly income. Do not go above 50%. If your auto payment is $250.00 and your other monthly debt is $750.00 then your total monthly debt is $1,000. Let’s say your monthly income is $2500.00. Divide one-thousand dollars by $2500 and your debt ratio is 40%.

Debt ($1000)/monthly income ($2500) = debt ratio (.4 or 4%)

Establish your vehicle needs. Purchase a vehicle that you need and one that accommodates your lifestyle. For example, you may not need the extra room from a large SUV if you are single. Consider the cost of gas and increasing insurance premiums. You can always rent these types of vehicles if needed or to satisfy your curiosity.

Do your research. Do not visit the dealership unprepared. Gather as much information as possible before going. Go online to www.carfax.com and get a report on your desired vehicle and get a carfax (www.carfax.com). This report will give you vehicle history like if the car has been in a collision. Knowing this may alert you to hidden costs. Also, you want to get information about the dealership. Visit the Better Business Bureau online and get reviews. Finally, try the old-fashioned way and obtain information by word-of-mouth.

Locate a convenient dealer. The dealership should be easy to access. Find a dealer with the most accessible staff with fantastic customer service.  This will be one of the most important transactions in your life as a first time car buyer; so, you will need as much assistance as possible.

Take a test drive. Virtually nothing is more important in your decision process than how you feel behind the wheel. How does the car feel when you are driving?

Determine your purchase price. Once you’ve decided what you like and have established what you can afford, it’s time to reach a purchase price. Visit NADA online at nadaguides.com, and get a retail price. Have this price with you once you reach the dealership. You do not want to pay over retail for the vehicle.

Secure financing. It’s always a good idea to have your financing secure before you reach the dealership; but if not, always check loan rates before arriving so you know your options as a first time car buyer. If you are a member of a credit union, check with your loan officer and take a pre-approval letter with you to the dealership.

ENJOY YOUR NEW RIDE!!!

Set up an appointment to talk with a member service officer about car loans right now by calling 1-800-628-5517.

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