If i buy then the car is mine and the loan i pay is on me but if i lease the car belongs to the company and i still pay a monthly fee but is the a loan against me as well . .if so how so .. can you please explain??
2006-10-04 01:05:31 · 49 answers · asked by The_man82 2 in Cars & Transportation ➔ Buying & Selling
You are charged a flat fee to lease a car for two years. That charge can be "borrowed" to spread that fee out and therefore you have a loan against you.
Leasing is generally not a good idea unless you intend to have a new car to drive every 2-3 years. Any longer, and your better off purchasing a vehicle you can build a little equity you can use at trade in time.
2006-10-05 02:39:42 · answer #1 · answered by Anonymous · 0⤊ 1⤋
A lease will not show up that you technically own a vehicle and it can be good that way, but once you pay it off, you have to either get another lease or buy it for a pay out and it's like buying the same darn car over again. I did it once and would NEVER do it again. It is a trap and they always charge you all sorts of fees at the end of the lease. The only good way would be to lease it for one year, and then buy it out and turn it into a loan, that way you could stay under the mileage restrictions which are much less than most people drive.
2006-10-04 17:57:39 · answer #2 · answered by inzaratha 6 · 0⤊ 0⤋
You are correct if, you buy and pay cash obviously the car is yours. If you buy but take out a loan technically the car is the lending institutions in which you borrowed the money from until you pay off the loan balance.When the car loan is payed off you get the pink slip and are the sole owner of the vehicle. If you take out a car loan and default on the loan payments the bank repossess the car, you loose any money you payed into the car loan.
Leasing...I would not recommend. First you almost always have to put down a deposit, a security deposit on the vehicle to be able to proceed forward with the leasing agreement. Then when you decide on monthly installments fees you are basically renting the car from the dealership! At the end of the lease you can either get your security deposit back or decide to buy the car. Here's the part that totally sucks....all those monthly payments you made to RENT the car, don't apply to a purchase ...the Vechile at this time is price quoted as a used vechile and if you decide to buy it you realize you are basically paying for the car twice over. At this time usually the warranty has expired and if you still want the car you take out a new loan to buy and are responsible for all maintenance costs. If you default on those monthly payments again: the lien holder assumes ownership.
2006-10-04 04:38:12 · answer #3 · answered by Brains & Beauty 6 · 0⤊ 2⤋
By leasing a car, you have the vehicle for a specified amount of time, usually two years. During that time you make monthly payments, albeit lower payments than if you bought the car directly. There's also an upfront charge you must pay, not unlike a down payment on a loan. Depending on the terms of your lease, you may be restricted to the number of miles you can drive the vehicle. Going over that restriction will incur more charges, as will any damage that the vehicle sustains while in your possession. Once the lease ends, you hand over the car and that's it.
As for buying the car, you pretty much own it, save for the monthly charge that you pay to the bank that financed the purchase. There are no restrictions for numbers of miles driven or any damages incurred, save for any repairs that you pay for. On the plus side, since you own the car, you can sell it and regain any equity that you have built up.
2006-10-04 05:25:25 · answer #4 · answered by Anonymous · 1⤊ 0⤋
The loan is still against you regardless. What happens on a lease is that when the lease is up, you have the option of refinancing the balance of the vehicle to keep it or you can trade it in for a newer model. Of course, mileage plays a huge factor in this because if you go over their mileage expectations, then you can pay a pricey amount once the lease is up. Same goes if the car is reposessed on a lease, you will have the option to pay up the remainder of the lease and if you don't, they will sell the car and you will be responsible for the ENTIRE balance on the SALE PRICE of the vehicle.
If you don't do a ton of driving and think you can stay within their limits on mileage, and if you would like to get a new car every 2 to 3 years and you pay your bills in a timely manner, then the lease is for you. Just remember though, you will forever be having a car payment if you go this route. Also, for some reason, the sale price on a lease vehicle is a lot higher than if you buy outright. Most new cars finance crom 4-7 years depending on price, down payment, monthly payments. So do you want to have a car payment forever, or do you want one say for 4 years then be done. You can always buy a new car in a few years down the road.
2006-10-04 03:40:00 · answer #5 · answered by Sandi A 4 · 1⤊ 2⤋
Leasing is an alternative form of financing. Both have fixed terms and payments. With a purchase you finance the whole price of the vehicle and pay that amount, plus interest, back to the finance source. With a lease you also finance the full price of the vehicle, and pay all the interest. You only repay part of the principle of the loan. A lease has an estimated value of the vehicle at the end of the lease term. (Residual value) This is deducted from the principle and you only pay the difference in your monthly payments.
For example:
Assume a vehicle that costs $30,000 and a trade in worth $5000. Also assume you are financing, or leasing the vehicle for 5 years. A final assumption is that at the end of the 5-year period, the vehicle is worth $7500.
With a purchase you would pay back $25,000 plus interest over the period of the loan. You would own the vehicle (worth $7500) You can keep it, or trade it in on a new vehicle
With a lease you pay back $17,500 ($25,000- $7500 residual value), and the interest that is charged on the $25,000.
Your payment is less, but at the end of the term you have nothing!
With a lease there is a limit on the number of miles you can drive and a per mile charge after that. You are also responsible for any and all damage to the vehicle. At the end of the lease, when you turn the car in, you will have to pay for any and all damage and over miles charges!
With both a lease, and a purchase, you are responsible for all maintenance. Some leases, but not many, may have a maintenance program, but that does cost extra, and will increase your monthly payment.
2006-10-04 01:40:01 · answer #6 · answered by fire4511 7 · 7⤊ 0⤋
A lease isn't like a loan--it's more like a very long-term rental. At the end of the lease period, you turn in the car and you stop paying the lease. The advantage is you can get a more expensive car for lower monthly payments. The disadvantage is you are just paying to use the car. You don't own it, you can't sell it, and after the lease is done you have nothing. Still, I'm on my 4th leased car at this point. Every 3 years I turn it in and get a nice, new car to drive. I get rid of them before anything goes wrong with them.
2006-10-05 01:50:06 · answer #7 · answered by Anonymous · 0⤊ 1⤋
I bought for years and then I leased about 3 years ago and I will never lease again. Some people enjoy leasing and usually they use the auto for business and write it off and trade up when the lease is up.
The issues I had with leasing was the high monthly cost (about $400) and all the low lease deal have a catch - limited annual mileage - The lease would have been $200 per month but because I want to drive 15,000 miles per year the lease payment increased. And if you go over the allotted miles then you pay per extra mile when you turn the car in. Plus is you want to buy the car at any time you need to pay a balloon sales tax payment to the state. This was a bid surprise for me when I bought my leased vehicle.
2006-10-04 06:49:57 · answer #8 · answered by Steve P 5 · 0⤊ 2⤋
When you buy a car your paying off the entire purchase price and when you have paid it off its yours. You own it. A bank gives you the money to buy the car from the dealer and then you pay back the bank plus interest. When you lease, someone else, usually the financial branch of the car company, buys it from the dealer and owns the car and you basically rent it from them. You pay for only the value of the car for the period you are using it, not the entire purchase price. For example, if you lease it for three years, you only pay for the value of the car for those three years plus a form of interest. The car is sold from the dealer to the leasing company so there is no loan against you if you lease. You sign a contract agreeing to pay the leasing company monthly installments, basically a form of rent, plus a form of interest. You never own the car and you must turn it back in at the end, usually back to the dealer. Its not a loan, its a contract, and you are bound to it. If you try to get out early be prepared to pay a hefty price.
2006-10-04 01:13:22 · answer #9 · answered by J D 5 · 3⤊ 0⤋
Just think as borrowing the down payment and paying it back latter. You do not own the lease car until the contract is up and residual payment is paid or financed. There are reasons to lease if you use the car for company busness. But most if the time buy so you will not have to keep milage to 15,000 a year or worry about wear and tear.
2006-10-04 01:13:05 · answer #10 · answered by John Paul 7 · 2⤊ 0⤋