Is it better to buy or lease a car?

Question

If your planning on trading in the car every 4 or 5 years

Answer 1

lease is always a ripoff..you pay the same,
only at the end you don't own anything...hummmmm

Answer 2

It's a question about cash flow vs. equity. They always say that it is better to buy what appreciates and lease what depreciates, so a car would be an item to lease under that definition. However, if you have high miles, want to customize your vehicle, or expect significant wear and tear on your vehicle, you should buy.

Typical lease terms are 24-39 months, so a 48 or 60 month lease would be rare. Usually leasing companies aren't interested in doing that because the residual is so low and the risk is greater to them. To compensate for that, they will either give you a lower residual, require more upfront, or increase the capitalized amount which translates to a higher lease payment. Since the advantage of leasing is a lower payment (freeing up cash flow), this higher lease payment would not be good for you. If you're only freeing up $20 a month by leasing for 48-60 vs. doing a comparable loan, then you really aren't giving yourself a real break.

For a 4-year term, you are on the border, but for 5 years I would recommend buying.

Answer 3

You can generally get a lower payment on a lease, but you might end up paying more if you go over the miles that you are allowed, or damage the car in any way.

If you buy one, then you can trade it in - and generally talk a better deal on a new car, though if you buy a new car - it depreciates ridiculously fast (literally the second you drive it off the lot).

I keep my cars for a while, so I always buy them - it feels good to own something. I didn't have a car payment for years, and even now the used car I bought only cost about $5700. I'm lucky to be able to do all my own maintenance and most repairs though.

Answer 4

At the 4 or 5 year mark, purchasing typically makes more sense. If you are trading in at a rate of 3 years or earlier then leasing makes more sense if you can keep track and be under the mileage limitations.

The problem with most people's purchases is they get themselves in a state where there is negative equity in the vehicle. However, typically by year 4+, most of the car has been paid off.

So in your particular case, trading ever 4-5 years, it makes more sense to buy.

Answer 5

Depends entirely on your needs and driving habits. It's just another method of having a vehicle to use. You can buy outright, or lease, which is like "renting" miles. Which is better for you tax wise, and will you go over the miles given and have to pay extra at the end of the lease?

Answer 6

leasing if your for sure going to trade it in every 4-5 years,but the mileage is what you have to watch on a lease they only allow so many miles for each year,so in a way buying is better,either way your still going to be paying out a lot of money for it either way,with a lease when the time is up and your over on mileage ,its going to cost you more than it would have to have bought it,good luck on it.

Answer 7

My son owns his own Taxi/Limo business in California and he leases.He owned at one time but the repairs were eating him up.Just make sure that you get a contract that has an unlimited mileage and repair clause.You will have to shop around,but You can find what you are looking for.I know several people who lease instead of buying,and they are very happy.

Answer 8

Leasing would be the better option just make sure about mileage allowance before you sign.

Answer 9

lease because you wont have to worry about going to the garage its kind of like an apartment you trash it for 3 years then you dont have to worry about it.

Answer 10

lease