What is the [dis]advantages of leasing, rather than buying?

Question

Which is more expensive?
And which one is more suitable if I am someone who buses/subways to work and only really drives on the weekend OR drives to the subway to work and only drives on the weekend?

Answer 1

The main disadvantage to leasing are.

1. You are locked into a specific time period for the car. So if you sign a lease for 3 years, you can't get rid of it earlier with out penalties.

2. You are limited in the mileage you can put on the car. This is fine if you can accurately predict the amount of mileage you place on your car and pre-purchase miles before hand. But most lease companies make their profit because people drive more than the lease agreement and don't pre-purchase miles during the lease signing.

3. Can't do modifications to the car. You can't add a cold air intake, tint windows, etc unless you get approval first.

4. The car isn't yours to keep at the end. You are only paying for the depreciated value of the car, not the actual car itself.

5. You must have full coverage insurance at all times.

Advantages to leasing.
1. You can drive a much nicer car that you couldn't afford otherwise.

2. The car isn't yours. Most cars start developing problems after 3 years. So you'll typically be giving up the car before car repair bills start coming in.

3. You won't be upside down on a loan. You keep the car for the time of the lease, once it's up, you're done paying. Unlike a lot of people who think purchasing is a better deal, then find themselves thousands of dollars upside down and must roll the thousands of dollars onto the loan payment of their next car.

4. Most of the time the time on the lease agreement is up almost at the same time that a major service must be performed on the car.

Good rule of thumb. If you can accurately predict your mileage usage, and plan to get a new car every 3 years, a lease agreement can make very good sense. (Make sure your bargin on selling price! and pre-purchase mileage). If you plan to keep the car more than 4 years or can't predict how much mileage you'll be putting on the car on a yearly basis, then purchase, you'll save money in the long run.

Answer 2

You just have to understand what a lease really is and then you can decide for yourself. When you buy a car, you make a down payment and make monthly payment. An amortization would show how much of your payments are interest and how much are principle. You will see that on a four year loan, the first two years are primarily interest payments. The third year is about half interest half principle and the last year is mostly principle. You now own the car.

A lease is the same thing with a twist. You make a down payment, pay only interest for two years and you own nothing at the end. Basically it is paying nothing but interest and having limited use of a car.

It is up to you to decide what is best for you. If you only use the car on the weekends it might be cheaper to rent a car.

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Answer 3

Why not just buy a nice used car? Why have a new car sitting in the drive most of the time while you are paying on it?

Answer 4

in actuality, its for individuals who adjustments vehicles regularly (regularly after the 4-5 years of the hire) and dont intend to rigidity that motor vehicle for the the remainder of its existence. as a exchange of paying $30,000 on a luxury motor vehicle, they hire it, and basically pay $18,000 or $20,000 . Then on the top of the hire, they are able to hire a different motor vehicle or seek for something to purchase that's new. they're spending much less. Dont could desire to fret approximately advertising the motor vehicle, and dont could desire to handle bigger money, in the event that they outright purchase a motor vehicle. so for a hire consumer: they are able to have a clean motor vehicle each and every 2,3,4,5 years. while a guy or woman who outright buys a motor vehicle, can basically arise with the money for a clean motor vehicle each and every 7,8,9 years (and manage the hassles of financing)