What is the true difference between leasing and financing a car? I'm torn between them.?

Question

I'm not sure which one is wiser. Which one would be easier?

Answer 1

At the end of a lease, the car goes back to the leasing company. You have a stack of lease payment receipts and nothing else.

When you buy a car, it's yours to keep for however long you wish to keep it. If you financed it, at the end of the loan you have your receipts for the loan payments AND a car that you now own free and clear.

Those are the TRUE differences between buying and leasing.

For the typical driver, leasing is seldom a good idea. If you drive less than 12k - 15k miles per year and take exceptionally good care of your car, don't mind having payments FOREVER and want to drive a brand new car every 2 or 3 years then leasing MIGHT be worth considering. The monthly payments generally are lower than buying but you'll never pay it off as long as you continue leasing.

At the end of the lease, you'll have to settle up any damage to the car with the lessor. Every nick, ding, smudge or stain will cost you. And if you run over the mileage allowance, you'll have to pay for excess use, typically somewhere between 12 & 25 cents per mile. That will be due in full at turn-in. If you lease another car they'll probably roll that into the new lease but the net result is that you'll ALWAYS be upside-down in the deal. And if the car should be totalled -- collision or stolen -- you'll have a substantial early termination penalty to pay. You can get GAP insurance to cover that; never lease a car without it!

Leasing can also be a good idea if the vehicle is used in a business. Bookkeeping is much easier, you just take a write-off for the lease payments, gas, oil, insurance and repairs. No need to track depreciation, allocate finance charges or other mule work.

But for the average driver, leasing is a turd that should be kicked to the curb. IMHO.

Answer 2

Leasing is basically paying for the part of the car you use. I've never known anybody to be pleased with a lease at the end. You end up with nothing, and if you aren't careful you'll end up owing more money because you went over the mileage. Buying a car is what it is. You pay for it, you own it. In my opinion the wiser choice. But then I drive stuff until it falls apart, then wire it back together and drive it some more.

Answer 3

explanation why a large style of human beings hire automobiles is by the fact 2 out of three human beings commerce their automobile each and every 2 to 3 years whilst the guaranty is complete. If those human beings financed for 5 - 6 years like maximum individuals ought to, to get a sensible fee, they in many circumstances owe greater on their automobile than it is worth and that they finally end up rolling a number of that inequity into their next motor vehicle and raising the fee even larger. in case you hire, initially, your fee is in many circumstances decrease, 2d of all, you're purely identifying to purchase the depreciation of the motor vehicle. once you get to the top of the hire, you have an option to purchase the motor vehicle for the residual value, or purely the unpaid element. If this is not worth that quantity, then you definitely purely hand the keys to the broking and start up up over and you enable the hire business enterprise take the hit whilst they sell the automobile at public sale. purely be careful once you're structuring the hire on the initiating and confirm you place it up for the miles you will rigidity with a view to no longer be charged for extra mileage. i does no longer advise a hire to any extent further than 36 months. And by ability of how, a hire is not greater worthwhile for the broking. you may negotiate the merchandising value in a hire purely like in a purchase order. The broking makes out because of the fact there's a rather solid hazard he is going to be waiting to hire you yet another automobile in 3 years instead of taking you out of the marketplace for 5 or 6 years with oftentimes happening financing. I recomend leasing to my acquaintances and family contributors.

Answer 4

well it's not quite like buying a house a car's value only goes down. leasing is only good if you own a small business and you can't afford to buy an automobile outright. Leasing sucks for individual owners especially when it's time to buy out the lease or return the car.

Answer 5

the difference is if you lease you turn the car back after a certain amount of time. financing you a re buying the car. as to what you should do. do you want to invest in a car to keep or basically just rent the car.

Answer 6

If you drive less than 12-15K miles a year, and don't mind not owning a vehicle outright, leasing is for you.
If you drive more than 15K miles a year, or would rather own the vehicle you drive, financing is for you.

Leasing is like renting an apartment.
Financing (or owning) is like buying a house.