do you lease or buy your cars? why?

Question

why would buying a new car and financing it be any better of an idea? I would rather pay $9000 over 3 years than $22,000 with interest over 6 and then have the car only be worth 25% of what you paid for it total.

Answer 1

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. There may also be additional taxes that have to be paid on a lease!

I buy my cars. Of couse I do not buy new cars, I am a used car dealer. Even if I was not in the business I would not buy new! Buying a late model low mileage used car allows the major depreciation loss to be taken by someone else!

Answer 2

Leasing a vehicle is shear stupidity, unless you HAVE to, or your business can write it off. All leases are just glorified rentals! You are just over paying out the butt for something you do not own. Many times, with no credit, you will have to lease first. Then you will have established a payment record to be able to be financed to purchase(this is an example of "have to") Why do you want to pay for something that you do not own?

Answer 3

My mom bought her car because she uses too many miles cuz of the lease having the whole thing with 10-12k miles a year or whatever

Answer 4

i buy my vehicles,i cant see paying out money for things i wont ever own,i never finance one though pay cash,its better that way,but to me paying money out means you should have something to show for it,with a lease its not going to happen,and if you want a new one every few years just trade it in or sell it,at least i know its mine when i pay for it leasing is like renting,your putting money in someone else's pocket,its just sense-less,good luck on it.

Answer 5

my dad leases since he says he gets tired of the same car for like 3 or 4 years and it is nice t always have NEW cars