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Automobile - Buying vs Leasing
There are many differences between buying and leasing a new automobile. The principal difference is; are you looking to pay for ownership of an automobile or to just pay for use of that vehicle? If you watch the ads you will see that lease payments look awfully low compared with loan payments when buying a new vehicle. Leasing is an easy way to get a new car every few years and let the leasing company worry about disposing of the old one. If you predictably trade for a new car at least every 4 years, have a business and could use this as a tax write off, do not have or want to come up with a down payment, only drive about 15,000 miles a year, like the fact that maintenance is covered during this 4 year period by the warranty, do not have a dog who regularly rides in your car or even children as anything that causes wear and tear on the car you lease could cause end of lease penalties you will owe. One of the biggest drawbacks of leasing is you are forced to make a major financial decision when your lease ends. You can turn the vehicle back in and buy or lease a new one, or buy the vehicle at the lease end price, which is the price set in advance when you leased it. If you buy a vehicle to begin with you will not have to make any financial decisions until mechanical trouble rears its ugly head. If you drive more than 15,000 miles a year leasing may not be for you. You may like knowing that once you have paid all of the payments the car is yours. If you do not mind driving an older car then keep on driving it until long after your payments have ended. For some people this makes good economic sense. If you decide that leasing may be for you, you need to investigate further than the payments. Do your homework and understand how leasing works. Learn the jargon and negotiate as hard as if you were buying the car. Leasing Terms
Go to Kelley Blue Book or Edmunds for checking dealer invoice costs. There are advocates on both sides of the buy or lease issue. It is a personal choice; your financial situation and your lifestyle that help you make that decision. Leasing can be a great deal for one individual and a bad deal for another. When you purchase a vehicle you pay for the whole value up front. If you continue to lease for many years you can add up the costs and see that the cost of leasing is higher than that of purchasing. The first few years of leasing are when you pay the highest depreciation and your not building equity to use in the future. See Also:
Comment on this article:
I like to lease becuase I get the new model every two years. It's really a decision about how long you want to keep the car and whether you not you can write it off your taxes.
I personally like to buy my vehicles rather than lease. However, if you are a business owner it may be better to lease for the write off. You can also write of many suv's as light trucks and not have to depreciate over time for tax purposes.
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