How does leasing and purchase fianancing work?

Question

with regards to buying a car.

Answer 1

To save us all time & effort of reading yet another one of my long drawn out , but accurate answers , first you should know that it usually takes better credit to lease than to buy.
so if you don't have decent credit and/or previous car credit you needn't read any further

If you havn't stopped reading, you can also see my "best answer" to GoodGuy ( Does it make financial sense to lease........?) from about 2 weeks ago.

That answer may also be what you are looking for.
If not ....give me more details on your question.

If you're looking for the actual formula for calculating a lease or finance contract ...Thats gonna take WAY too much time, effort , & details.

Answer 2

In Leasing the seller (or a bank or finance company) retains ownership of the vehicle. The customer just makes a monthly payment for its use & returns possession at the end of the lease period.

In purchase financing, the customer owns the vehicle, but borrows the $$ to pay for it from a bank, and agrees to repay the bank in fixed monthly payments over a period of time. At the end of that period, if he has made all payments, he owns the vehicle "free & clear." To assure the bank will be paid the buyer is required to give the bank a "lien" on the vehicle, meaning the bank has the right to "repossess" the vehicle if the buyer fails to pay.

Answer 3

I don't understand your question, but I assume you want to know how financing makes moeny for the people doing it - through interest, assuming the lessee or creditee has good credit and a steady job.