what is cheaper-buying or leasing a car?

Answer 1

Most of the time lease payments are much cheaper than retail payments.
In a lease, you only pay for the portion of the car you use. The rest is the residual and at the end of the lease term you have the option of buying it or turning it back in.
With GMAC, which is who I use, I am able to walk away from the lease at the end of the term and owe absolutely nothing. As far as my mileage, I prepaid for mileage and had the cost rolled into my payments. Pennies per day, if that. At the end of my term if I have not used all of my mileage that I prepaid for GMAC will cut me a check for the unused amount.
I like leases because it allows me to NEVER have negative equity and it allows me to get a new car every three years. The average american trades cars about every 36-48 months. In that case a lease is better than retail.

Look at it this way. Say you are looking at a car and you are going to drive 20000 miles per year. 15000 miles a year is a standard lease, so you are purchasing 5000 extra miles per year. 36 month term vs. 60 month retail.
Pre pay for your mileage: .10/mile 15000 miles
pay at the end of the lease: .15/mile 15000 miles
retail the car: still owe 24 months of payments and when you go to sell you will be deducted anywhere from .25/per mile up to .47/mile for overage. 25000 miles (at end of payoff)
Example: prepay: 1500.00 over 36 months=41.66/month
pay at end: 2250.00
retail: -8750.00 off the value of the car (using .35/mile)

Now, if you plan on keeping the car for years and years then retail would be the way to go.
That's just my opinion. I make a living selling cars so take that for what it's worth.

Answer 2

Leasing is cheaper, because the payments are lower. This is because at the end of the lease, you are left with nothing. No money returned, no car, no nothing. You've essentially rented the car for the term of the lease.

In the long run, it is a wiser use of money to buy. Yes, the payments are more expensive, but you'll have a car that is yours beyond the lease term, that you can continue to drive, or sell.

Leasing is generally only a good idea for those people that really want a new vehicle every 2 - 4 years, and will drive the car an average amount of miles. Be wary of leasing if you drive a lot though. The extra miles will kill you at the end of the lease.

My brother once leased a Jeep for 3 years, but had to quit driving at the end of 2 because he'd already reached his alloted miles. The last year of the lease he essentially kept the Jeep in the garage, while he had to buy another car to drive.

I just purchased a brand new Ford Fusion, but I intend to be driving it until 2016, unless it gets wrecked first. I generally drive my cars into the ground to get maximum value out of them. They are usually only good for the scrapyard after I'm done with them.

Answer 3

There are benefits to both.

If you desire a lower monthly payment, then usually the lease is the way to go. But the drawback of the lease is that you're restricted to a certain amount of mileage per year. Usually it's 20,000-25,000 miles per year. Anything above that, and they charge you a percentage per mile. At the end of a lease, you have the option either to turn the car back in, or pay the remaining balance and then you would own the car. Usually the balance is rather high.

If you buy a car outright, then you are not restricted in regards to mileage. But unless you put some money down, you're at the mercy of the lender as to what your payments will be. But if the terms are suitable for you, then when you finally pay the car off, it is truly yours and you will obtain the title to it.

Both have benefits and drawbacks. It all depends on your driving habits and financial situation.

Answer 4

As far as cheaper, it's definately less money to buy. Leasing will be more expensive, but it does provide you with many benefits that buying does not.

Your personal situation should dictate whether or not to lease, such as mileage per year, can you afford high payments, are you comfortable driving a car with no warranty, etc.

Answer 5

buying because in 5 years it's yours leasingyou have to keep getting a new lease over and over you end up losing money and if you have a car that is your you can trade it in on a new car so you would save so much money by buying a car

Answer 6

buying definently pays off in the long run.

Answer 7

In the long run, buying.

Answer 8

buying used