Questions about Leasing cars.?

Question

I don't really know anything about leasing but I do know that I am the type to get bored of a car very quickly and would probably never keep a car 5 years to pay it off. I would like to look into leasing options.

What are the differences between leasing and buying and what are some pro's and con's?

What happens if you are in an accident? Do you act like you would a purchased vehicle and have your insurance cover it?

How long are most leases terms for? I don't think I like to keep the same car for more than a year. Are there 12 mo. leases?

Answer 1

Leasing would usually be cheaper if you get rid of the vehicle after the lease is up. You'd have to look at what financing you'd get for both options to be sure. If you lease you can only drive so many miles or you'll face penalities when you return the vehicle. You are usually allowed 12,000 miles per year on a lease.

Answer 2

I am not a supporter of leasing vehicles, unless you use the vehicle for business and drive a lot of miles every year.

Visit the site www.leasetrader.com and you will find lots of people trying to get out of leases. The major drawback to leasing is that it is the most expensive way to acquire a vehicle. The second major draw back is getting rid of the car if you no longer want it or need it.

It is my belief that the best deal is to buy a two-year-old car with less than 25,000 miles on it. Some cars loose 35% to 40% of their value in the first two years. You will then still have a car good for at least three more years.

Or, you could take over a lease where someone is offering money to buy out of their lease agreement.

Answer 3

Leasing can be very beneficial if you like to change cars frequently, and yes there are 12 month leases though most are in the 24-60 month range.

Benefits of leasing are that you can often a car with more options for the same or less than if you purchased the same car. You pay the anticipated depreciation of the vehicle over the term of your lease plus use tax and at the end of the lease you can either buy the car for the residual of the car, you can sell the car to someone else, or you can turn it in and lease another car.

Disadvantages are that you will always have a payment. Basically you are renting a car for the term. Few times is it to your advantage to purchase a car you have leased as often factories enhance residuals to entice customers to lease...similar to giving a rebate for purchase....basically they project a higher residual value so the depreciation is less and therefore your payment it less. Also you may have to raise your insurance liability amounts as most leases specify at least 100k/300k for liability limits. Getting out of a lease early can also be expensive.

All things taken into account, in my opinion, most people should lease. It allows you to drive more car for less money, and you stay in a new car with warranty and the latest greatest safety equipment.

Hope this was helpful.

Answer 4

I have bought and I am leasing now the difference is when you lease you are paying for the residual value of the vehicle between the years you are leasing it. For instance I am paying $10,000 to lease a truck for 3 years vs. $35,000 to own it. But if your like me by the time I pay one off it isn't worth much anyway.

I have 15,000 miles a year. I never go over that. It depends on how much you drive.