buy or lease my car?

Question

I know this question has been asked a million times but I have always bought a car/financed and I feel like I always get burned. Cars depreciate so quickly unless you have a Toyota or Honda.

It makes me sick to think I owe $2000+ more than the car is worth and soon it will have 100,000 miles.

I only drive 12,000/yr and am planning on leasing a vehicle for 15,000 just to be safe. Please someone tell me why buying will be a better choice because I am set to begin a lease soon.

Answer 1

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.

Answer 2

The devil is in the details with leasing. If you drive more than your allotted mileage, you pay for each mile over. There are clauses in the contract regarding "acceptable" wear and tear on the vehicle. If you don't meet those conditions, you owe the dealer more money. So, you could easily get stuck with a car you have to return to the dealer that you now owe a few thousands dollars on! Accountants have always told me to buy a car and drive it to death. My 1996 car has 165,000 miles on it (a Chevy, no less) and is running fine. If I'd leased that car and leased another to replace it, I would have been screwed. I had a 60-month loan, and I haven't made a car payment in almost 6 years.

Answer 3

Leasing is renting. All those payments, and you don't have to worry about the depreciation because you own nothing at the end of the lease If you drive 12,000 miles a year, how do you have 100,000 miles on a car that you still owe money on?

Answer 4

Leasing offers flexibility in terms of the options available. If you wish to change your car every few years or if your lifestyle demands a new car every few years, then leasing is an attractive option. So lease is more beneficial compared to a loan.

Answer 5

I would buy it. If you only drive it for 15,000 miles, you are making a payment on it, still have to insure it and pay for insurance. You may as well buy it and then trade it in. We looked at leasing my car but we figured that since we have to pay all of these things, we may as well just trade it in just after a year-which is what we did.

Answer 6

Simple! BUY Toyota - I have 215,000 miles on my Previa and have used it as the family bus for 10 years and still going. So long as you keep up with the maintenance - BUY a car that you won't hate paying monthly bills for! 100,000 mile Warrnty or 5 yrs - worth buying it.

Answer 7

you have the answer to your questuion. just buy honda or toyota.