what are some reasons to lease v. buy a car?

Question

I have never leased - only bought new. My 2004 loaded Mazda6 paid $27K for, now has a trade-in value of $13K!! -and I only have $19,000 20,000 Miles. My car payment is $420/mo.

I plan on buying (or leasing??) a new Ford Edge (wow - a nice vehicle) total cost for $30K. I could put down $10K - ll I want to keep my monthly payments low (less and $400), and I plan on owning this car only 2 - 3 years.

Should I buy or consider leasing? and why -- ? Thanks.

Answer 1

if you own your own buisiness, then lease.
If you lease and have to pay with after tax dollars, you will own nothing at the end of the lease, and decide if you want to buy your own car. They will hit you with mileage and damage charges if you return the car after the lease.
If you want to lower your lease payments, you have to put more down which is essentially purchasing the car. If you can keep the car in great shape, then buy it, and sell it after you decide to get rid of it. With a lease, at the end of three years, you are forced to make a decision. You can also be charged with a pre-lease charge if you want to sell it in two years.
If you buy it, you can make that decision any time, because the car is yours.

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.

Answer 3

Hmmm. Well, I had thought of leasing, until I actually checked it out. They wanted to add the sales tax, license, insurance all on the lease. Now that was more than what they advertise on the TV, plus you can only put X amount of miles on it for a year, and anything else they charge you per mile. When you bring it in to trade off, they will also assess you so much for vehicle damage and usual wear. Sell your car outright to someone, and then buy the new one with the downpaymet that you get back from the bank after they take what you still owe on your car as a loan. They will ask for that first, and give you whats left. Lets say you get the okay from your lender to sell it, and you get lets say 15,000 for it. Now lets say you only owe 5000.00 left on the loan you took out. They take the the 5000.00, and give you 10,000.00. Now you can put 10,000.00 down, but will need a 20,000.00 dollar loan. You can get it for 6 years, and pay the least in payments, but are you going to keep it for 6 years?. If you do the trade in thing, you will get less for your car. They know how to juggle the numbers. Good luck.

Answer 4

It depends on a few things.Leases set a certain amount of miles you can drive per year and if you exceed that amount you pay a extra fee per mile and with a lease you are required to maintain the vehicle to the leasing company's standards as for having service done and who does the service.But if you can live with the various restrictions and B.S. and don't want to deal with selling the vehicle yourself a lease makes sense

Answer 5

lease it.

And the answer is simple.

You are going to finance 20K and only keep it for 2-3 years?

At the end of the third year you will still be upside down (owe more than the value) and then what do you do?

Answer 6

relies upon on in case you do very lots using or no longer. They set limits on what number miles are allowed interior the hire. in case you injury the variety of miles, there's a penalty further according to mile pushed previous the hire. So i would not do it in case you have a huge go from side to side. yet with luxury autos, the quantity the hire is in fee is under getting a automobile for 3 or 5 years and turning it lower back in on a commerce.