Car Leasing?

Question

How exactly does leasing a car or truck work? What are the pros and cons? Is it safe?

Fire4511 thanks, how about if I agree to lease for 3 years but decide after 2 years I want to trade for something different, can I re-lease on a different car?

Answer 1

If you want a new car every 2 or 3 years, leasing is the way to go, but if your keeping it for its life, 10-20 years, you should buy it.

If you change your mind and decide to keep it during a lease, it will cost you, if you put on to many miles it will cost you, if you give it back in poor shape, it will cost you..... :(

Answer 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.


Edit to answer additional question.

You can end a lease early, but usually it is very expensive to do so. Most leases have early termination fees, and they also pro rate the allowable mileage, in the leasing companies favor. I have seen cases where the cost to terminate a lease early was HIGHER than the total of remaining payments on the lease!!!

Answer 3

Leasing is a little more complicated than buying with a loan, and requires more care. The following web site may be helpful to you.

http://www.leaseguide.com/index2.htm

Answer 4

it's like renting an apartment

pro: you get to drive around a new car for cheap and do not have to worry about most of the car troubles that occur after the 3-year mark

con: you will never own it

Answer 5

lower payments or more car for your money,you dont get to keep it and have to lease or buy later,it has to be maintained the same,you are responsible for mileage overages and any damage.no tax breaks unless its for business.sometime little or no money down,make sure you read and understand the fine print

Answer 6

tpjp19 You are on newspaper!
http://www.osoq.com/funstuff/extra/extra01.asp?strName=tpjp19