The Automobile: Rent or Buy?

Florida's public passenger transportation system may not be among the most efficient in the world. Despite the variety of land passenger transport modes – metrobus, tram, metrorail, Tri-rail – the long distances between urban centers and the low population density of these urban centers mean that the public transport service is always in debt with Floridians.

The atomization of the urban centers of interest throughout the geography of the State led to the development of a solid road network made up of more than 12,000 kilometers of highways and first-rate highways. This infrastructure, coupled with the online production of millions of vehicles, access to credit and the availability of cheap fuel, soon “motorized” the way of life of North American society.

In Florida, the number of registered cars currently exceeds 13 units, which means, in a local population of about 850,000, that almost 19 percent of Floridians would have a car at their disposal. Such is the importance of the automobile in the daily activities of our people that it is difficult to conceive of a family that does not have at least one vehicle to get around.

That is why it is important not only to know how to choose the type of vehicle but also to distinguish if it is more convenient to rent it under the “read” or buy it. Let's see.

How does the lease work?

The Spanish translation of “lease" it is "lease”. In this case, the possession of the contracted vehicle will be subject to the following conditions:

1. The contract focuses on the temporary use, usually for 3 years, of a new vehicle.
2. The user will pay only the value equivalent to the amount of depreciation caused during the period of use.
3. It is common to pay a low initial fee and consecutive monthly installments that include principal and interest.
4. Both the initial installment and the stipulated annual interest will depend on the credit rating of the person who leases; terms are generally open to negotiation.
5. The use of the vehicle is measured, for the purposes of the contract, by the miles traveled. The higher the mileage, the higher the cost. The average number of miles per year is usually 12,000.
6. The user will be covered during the lease period against mechanical repairs and damage to the vehicle and will only have to pay for the maintenance service.
7. The vehicle must be delivered in similar mechanical and appearance conditions to the original ones, taking into account normal wear and tear.
8. Miles in excess of the stipulated contractual limit must be paid on the day of delivery of the vehicle; unused miles, on the other hand, are not deducted from the balance.
9. In case of early termination, the user must pay the remaining balance of installments and, eventually, suffer any contractual penalty.
10. At the end of the term of the contract, the lessee may acquire the vehicle for its salvage or residual value.

How does the acquisition work?

New vehicle sales contracts are usually subject to the following terms:

1. With the signing of the contract, the buyer acquires possession of the vehicle but, if there is financing of the operation, the seller or the lender will keep the property until the debt has been paid.
2. The initial installment and the monthly installments are calculated based on the total value of the vehicle and, therefore, are much higher than the lease installments.
3. Loans for the purchase of vehicles are usually for terms of up to 6 years.
4. The buyer will not have any limitation regarding the number of miles traveled, mechanical and appearance modifications and the type of use given to the vehicle.
5. The purchaser must cover all expenses related to mechanical repairs and maintenance that are not covered by the manufacturer's warranties.

With these elements of judgment that we have outlined, it is easier to make an accurate decision regarding leasing or acquiring a new vehicle. At this level, everything will depend on the importance that the vehicle may have in our lives.

The "lease" route looks convenient for (a) people who love technological changes such as hybrid and electric systems, robotics and satellite navigators, ready for release every three years; (b) drivers who do not depend on the vehicle for their work or who are fans of road tourism; (c) users with a good credit rating, say, above 580.

The acquisition path, on the other hand, is appropriate for people who make intensive use of their vehicle and who like to make structural modifications to it. Full ownership, in addition to allowing the owner to use and even abuse, guarantees him the right to dispose of his assets at his own discretion.

Personally, I tell you that when I moved to the US I started renting a car but I exceeded the mileage limit and had to pay a large amount for the excess; Later, I bought a hybrid vehicle with the intention of saving on gasoline and monthly payments, but after 6 years of use, it suffered mechanical damage without a dealer warranty that forced me to change it.

Currently I feel very comfortable driving a car leased under the three-year, 12,000-mile-per-year scheme. I confess that I often enjoy imagining what the vehicle I will choose will be like when I sign my new “lease”, in a couple of years.