What is the advantage of leasing a car as opposed to buying it?

Answer 1

Not much that I can see. You have all the same expenses and responsibilities as wou would if you owned the car (and you usually end up leasing something that is more expensive to insure), you hav3e to insure it according ot lal the requirements of the leasing company, so it ends up a bit more expensive, and yet you don't have the advantage of owning it. I used to be intrigued by the idea, but am no longer interested.

Answer 2

They serve different purposes.

Leasing a car is like a long term rental. At the end of the contract, you own nothing. Net equity in the car is ZERO. The lease finance company was paid for a principal amount equal to the difference between the price paid (MSRP or there abouts) and the residual value (the projected value of the car when you turn it back in). And, on top of the principal, you paid 100% (yes, you read that right -100%) of the Interest on a loan amount for the full value of the car (yes, not just the principal - but the whole thing). Further, on the lease, you pay the taxes and DMV fees in the price of the loan.

For a car purchase, at the end of the loan you have equity in the car. It is worth what the market will pay for it. It has value to put as a downpayment for another car. You paid both the principal and interest for 100% of the puchase price (minus any downpayment).

A lease is a good deal for business because they don't have to worry about depreciating the expense; they can walk away from the expense if the business fails; and they can write off the full cost of the lease. For personal use, a lease makes sense if you must be in a new car every few years and you're terrible at selling cars yourself.

A purchase is a good deal if you tend to keep cars for a very long time. If you can keep a car for 10 years, and your loan was for 5 years, the cost per mile will be dramatically less than any lease could possibly compete with.

Answer 3

Leasing a vehicle is the worst mistake I have ever made! I can say this honestly becuase I am in a Smart Buy right now. I have found that the main thing that a lease accomplishes is to get you into a vechicle that you couldn't afford to pay for in the first place.

If at the end of your leasing term you decide to keep the car, you are going to have to refinance the amount that you owe. By the time that you actually pay the car off you will have had it for 8-10 years and paid an ungodly amount of money for it.

If you turn it back in, unless it is in the exact same shape as it was when you drove it off the lot you are going to be charged extra fees. The chances of turning in a vehicle without any wear & tear are slim to none! You are going to have scratches in the paint, dings, worn tires at the very least. If the dealership sells it for $12,000 and you still owed $18,000 that is $6,000 that they could make you pay.

Also, you will be charged a certain amount per mile for any overage on the odometer. I think the price for my overage is around .20 or so. After going on vacation the last three years and the other driving I have done getting back and forth to work, I am about 1,000 miles over with a year to go on my lease. I figured I could stay within the lease limits...poor thinking on my part!

Some people may think that there are advantages to leasing a vehicle. But, take it from someone who is in one...THINK TWICE!

Answer 4

Karen I'm sorry your getting so much misinformation about leasing. I would venture a guess that none of the people here have even leased a car. I currently have two Honda's on lease and have had five leases' in my life time. I'll bullet point lease advantages to keep it brief:

LENGTH OF CONTRACT: Most leases run on a 36 month contract. Studies by edmunds.com, NADA and Kelly Blue Book put the average lenght of ownership at 39 months, yet most people who purchase have a 60 or even a 72 month loan. By extending terms, to keep the payment low, they are very upside down in thier loan at 39 months.

ALWAYS UNDER WARRANTY: As mentioned above, most loans are 60-72 months yet most warranties are only 36 months long. So, halfway through your car payments, your warranty is up and who knows what could happen?

CHANGES IN SAFETY: It seems like every year the manufactures are comming out with better safety advances. Leasing a car every three years guarantees you will always be in a safe car.

MONTHLY PAYMENTS: Think about the price of the average new car - it's close to $25K! Even with 10% down, after TT&L your borrowing $25K and with an average APR making a $550-$600 payment! Yet a lease on that same car will run you $350 per month. You only pay for the part of the car you USE, not the whole damn car.

I DRIVE 20000 MILES PER YEAR: So! Every leasing company allows you to pre-pay your miles ovver 15K per year. Usually, the cost is about 15 cents per mile or 20 per mile at lease end. Either way, if you know your a high mile driver, ask for a high mileage lease.

LEASES HAVE HIDDEN EXPENSES: Wrong! Consumer laws have all but erraticated those bad for consumer leases. With Honda, they give you a lease contract in plain English, no fancy lawyer talk. Honda even gives you $1500 in the form of a damage waiver at lease end. That means the first $1500 in excess damage is covered by Honda. This means if the tires are worn or the windshield is cracked, you dont have to worry about it. Honda also includes GAP protection at no charges to you.

The truth is back in the day a lease was the worst thing you could do. Today a lease is an easy and affordable way to drive a nice, safe car.

Remember what on e of the richest guys in America said, "If it APPRECIATES, buy it. If it DEPRECIATES, lease it". Warren Buffet.

Good Luck.

Why would someone rate this a thumbs down? Ohh I know, ignorance of an actual lease.

SWEET ABOVE ME:
Dont just email me to complain about what I wrote and then block me when I want to answer. While writting my answer, you must have submitted your answer. So dont be a little baby and think I made a blanket statement about you - I had no idea you posted that information. So stop being a BABY!

Answer 5

Only do this if you "have to" have a new car every 3 years or so. The advantage is you don't have to worry about selling it at the end of the lease. It is an expensive but worry free option. On the other hand, you are better off financially keeping a car for 6 plus years or buying one at least 2 years old since cars depreciate fast. A general rule of thumb is a car loses half of its value in 4 years so a $20,000 car becomes $10,000 or you lose $2,500 per year.

Answer 6

If you are the kind of person who has money to burn on cars and needs to make an impression with a new car every few years for work, then a lease makes sense. Salesmen mostly fit into this category. Other than that a lease is generally a bad deal. The payments are lower, but you have no equity. A much better buy is to get a 2-3 year old car. Car's in that range have prices (in monthly payment) close to a lease, while still having most of their life ahead of them.

Answer 7

There is only one advantage to leasing over buying.

You can drive a car you can't afford with a lease.

Leases are a BAD idea. They are not good unless you can write off the payments or you get a car allowance from your job.

Answer 8

The only major advantage to leasing is for expensive cars which have a high residual value. This is the value of the car after the lease period. If it resells at a high level you are only paying the smaller remainder in your lease payments. This allows for you to get a better car for cheaper payments. Honestly, that is the major advantage.

Answer 9

The advantage is that in 3 or 4 years you will have no car and no money....

Leasing is ONLY FOR BUSINESS, because you can write as a tax expense.

Answer 10

the two advantages of leasing are: a million) decrease month-to-month money and a couple of) you may nicely be in a sparkling motor vehicle each and every 3 or 4 years (merely in time so which you will get sick of the single you have have been given) the situation is that the motor vehicle is rarely yours (you're exceedingly lots renting the motor vehicle). additionally, till you artwork interior of 5 miles out of your activity, you will continually be concerned approximately going over your mileage allowance (which could be a worry). till you very own a employer (and could write off the hire money) i could evaluate buying particularly than leasing.