What are the advantages of leasing as opposed to buying a vehicle?

Answer 1

A lease only makes sense if you are the kind of person that wants a new set of wheels every 3 years or so, AND you drive an average amount of miles. The monthly payments are lower and you do not have any troubles trying to sell or trade in the car later on.

If you go way under your miles, you really don't get the full value out of the lease. If you go way over on your mileage, you pay penalties out the whazoo.

While buying will have higher payments, you will have the vehicle and it's residual value left over after the payments are done. You can continue to drive the car payment free for years, and when you want to get rid of it, you sell it and get some money back!

I can't tell you the wonderful feeling I've had driving all of my cars well beyond the payment end dates. Driving a car with no payments is a joy! My first car I got 7 payment free years of driving out of it. My second car I got 5 payment free years of driving out of it. My third car I got 3 payment free years.

It's a nice feeling to drive for 15 years and not make any payments during those times.

The best value of all is to buy a lightly used car, 1 or 2 years old, where the original owner has already paid for the biggest portion of the depreciation, and then you buy it and drive it for 8 or so years after that.

Answer 2

The advantage of leasing is lower monthly payments compared to buying with a loan.

The reasons that payments are lower with leasing is that you only pay for the natural depreciation in the car's value, not the entire value.

All cars depreciate in value, even those purchased with a loan. That's why you pay $30,000 for a car and can only sell it for $16,000 three years later. You have nothing to show for the missing $14,000 you've made in payments. It's gone.

With a lease, you pay just the $14,000, not the full $30,000. It's true that you have nothing to show for the $14,000 at lease-end, but neither does the person who buys with a loan and makes larger monthly payments. Either way, you lose the $14,000. A car doesn't know or care whether it's purchased or leased; it loses value regardless, and the owner loses money.

Answer 3

Buy things that appreciate in value, borrow/rent/lease things that deppreciate" ~ My Mom

While not always heeding motherly advice, i do lease most of the time. There are a few things to consider when leasing. One, that you are going to stick with in the miles. For me that meant i needed to assess my job security. Two, are you going to be ok with the fact that you've payed for a car for lets say 3 years, and at the end you won't have that car unless you elect to purchase. Three, how long do you like to keep your cars? For some people leasing is a great option. Others it doesn't work for them. Like the 10 people who have posted on here before me, most seem like they've either had a bad experience or heard or someone who had a bad experience. Leasing can be great it just depends on the person.

My suggestions if you are going to lease:
1. check the manufactures website. they will typically have a tab where you can check and see if there are any special leases. understand that you can lease a car like they have advertised with out that amount due at lease signing, your payment will increase, but then you don't have to come up with a lot of money.

2. don't lease a car for more than 48 months. and i'd suggest trying to stay away from 33, 39 or 42 months leases. you will have to pay for registration that you won't get back because the lease doesn't end on the year mark.

3. if you can afford to (monthly payment wise) put as little money down as possible. keep the money in your pocket. in a sense you are renting the car, why pay more then you'd have to.

4. when negotiating make sure to negotiate everything. unfortuantely some dealers just show you a payment for a certain amount of months. go in knowing what you want to pay for the car wether you were going to pay cash, take out a loan or lease. also have them work up some payments based on different scenarios. the rule of thumb for leasing is that for every $1000 dollars it equals out to around $30 dollars a month. if you feel mileage may be an issue, you can usually buy it cheaper upfront if you know you are going to be returning the car at the end. also have the dealership work up some numbers with different banks, sometimes the manufacturers bank isn't always the cheapest way to go. there is a rent charge that you have to pay on any lease known as the money factor. typically if there is a special going on, then that can't be changed, but if there is no special then that can fluctate. also the money factor is based on your credit score and how long the lease is. working the numbers for different months can lower or raise your payment substantially. the other fees to look for is, bank acquisiton fee (has to be paid), disposition fee, security deposit and purchase fee. the acquistion fee is what the bank charges to take in your lease, the disposition fee is a fee they can charge when you return the lease and don't purchase, the security deposit will typically be refunded when you return the lease or if you lease through the same bank again it can rollover to the next lease and the purchase fee can be charged when you elect to buy the car at the end of the lease. these are non-negotiable, they can sometimes be converted into a portion of the money factor, but they are there.

5. find out if the lease comes with gap insurance. this will cover you if the car is totalled, the difference between what your insurance company values the car at and what the actual dollar amount that the car is to the bank. since you are leasing and only paying for a portion of the car, if you don't have gap then you could be responsible for the entire car in the case of a total loss.

6. some lenders also offer wear and tear coverage. this can protect you from having to pay for things like, dents dings and chips in windshields at the end if you return the car at the end.

7. remember that you can treat this car like it is yours. in 2 years if you want something new you can trade it in. will it cost you money to get out of it....potentially, but it is always an option.

8. the other great thing about leasing, is typically you're leasing through manufacturers warranty, so financailly you may only be resposible for oil changes, brakes, gas and glass. no worries about paying for an a/c or transmission, etc.


good luck!

Answer 4

My uncle used to lease all the time because he enjoyed getting a new car every so many years...
I personally dont see any advantages because you never own a vehicle that you have been paying on...they tell you how many miles you may put on this vehicle and you just return it with getting nothing in return except a smaller bank account.

Answer 5

I really don't think there are. You are limited to how many miles you can put on the thing and you have to make a hefty down payment. Then you have to turn it back in when it's done. If you do a lot of road travels leasing is not ideal. I say just buy a car you can afford and be done with it.

Answer 6

always "having" a nice new car....
you tecnically shouldnt worry about maitenence but ive met some people who have had prblems with that.... dont forget that leased vehicles usually have a limited amout of milege you can use,,, anything above that you will start paying for each mile... godd luck!

Answer 7

there are none