I've never leased before, always bought and paid off my cars. I'm just curious. Your thoughts are welcome. Thanks in advance.
2007-11-20 09:45:14 · 12 answers · asked by Dr. G™ 3 in Cars & Transportation ➔ Buying & Selling
In Leasing, you're only paying for depreciation. You DON'T OWN the car.
So if you lease the car for 3 years, you are paying for the difference between what the car is worth today vs what the car will be worth in 3 years.
So say the car is worth $40K today, but 3 years from now, the lease company believes the car will only be worth $18K. Your lease means you will be paying for this depreciated value of the car ($40K-$18K = $22K).
This means over the 3 years you will be paying $22K (+ the interest on that $22K) to drive the car. After the 3 years, you'll need to return the car. Typically dealerships will then allow you to purchase the car for a value that is typically greater than the $18K the car is now worth to them.
The biggest problem with lease agreements is the mileage limitation. You are restricted on the amount of miles you can put on the car. This is fine if you know how much you will be driving the car, but many people don't and many underestimate and end up paying a fine on mileage overage.
You can typically purchase extra mileage at the beginning of the lease for significantly less, and if you can get a good estimate of what you believe you'll be using this will limit your overall cost significantly.
My rule of thumb. If you plan to get a new car ever 3 years and you can properly estimate how much you'll be driving in those 3 years, leases can be a good deal. As long as you follow those two conditions, you are never upsidedown on a lease payment, unlike those people who purchase, then try to sell the car before 3 years and find themselves rolling over thousands of dollars into their next car loan.
If you plan to keep the car for more than 4 years, or don't have a clue on how much driving you do on a yearly basis. Then purchasing is typically a safer choice
2007-11-20 09:52:35 · answer #1 · answered by hsueh010 7 · 5⤊ 0⤋
Downside To Leasing A Car
2016-12-28 10:12:04 · answer #2 · answered by troung 4 · 0⤊ 0⤋
Just my opinion: I leased for a lot of years when I couldn't afford to buy because the monthly payment would have been too expensive for me. When you lease, you are basically only paying for a portion of the vehicle and not the whole vehicle and therefore the payments are less. Currently, I am buying my car. This is why: My last leased vehicle was for a 4 yr. lease. At the end of the 4 yrs., it had taken quite a bit of wear 'n tear (I have 2 kids) and the leasing co. wanted another $15k or $16k for me to go ahead and buy the remaining value that was left in the vehicle (according to them). I can't remember the exact amount, but this was close. Well, I shopped around and found a new car for almost the same price and with payments that were only $15 more per month than the payments on the leased vehicle. It made more sense to pay that amount of money for a new vehicle than a used one. AND most importantly, at the end of 5 yrs, I OWN the vehicle. When your lease is up, you have nothing and you've spent all that money. Kinda like renting vs. owning a house.
Oh, and I was charged fees in the end by the leasing co. for the wear and tear, etc. I really felt stung by them and I'm sure I was penalized for not buying the vehicle because it does them no good - they have to sell it at auction and probably did not get the kinda money out of it that they would have liked.
2007-11-20 09:55:38 · answer #3 · answered by ♥ тнє σяιgιиαℓ gιяℓfяι∂αу ♥ 7 · 3⤊ 0⤋
If you like a new car every 3-4 years, lease it. With leasing, besides a newer car, you get a more up to date model, sometimes with gadgets that were not available or not included in the model of your choice. For example, 4 years ago GPS was an expensive add on, now they come included with many models. Same with rear view cameras. Safety gets better, often the mileage increases too with newer models. I like the unlimited warranty aspect of a new car, and if you stay within that time, you never have to worry about repairs. You might be losing more money by leasing a car than buying and keeping the car for a long time, but if you can afford it, lease it instead of buying it. On a year to year basis, you lose the same amount of money, believe me. It is only slower and over a longer period of time when you buy your car.
2014-12-10 01:39:44 · answer #4 · answered by Ekna567 1 · 0⤊ 0⤋
Leases are only good if you are the kind of person who likes to have a new car every 2-3 years.
2007-11-20 09:48:33 · answer #5 · answered by soaplakegirl 6 · 3⤊ 0⤋
I leased a car and the downside is:
1. it's not yours
2. your charged for the extra miles you use
3. you can't make any changes to it
4. your paying a car note and in the end you have the option to buy but it's not worth the price they want to charge you, and
5. if you don't buy or don't, you starting all over again
I'm buying my car now and I love the fact that it's mine in the end and I'll have the title. Good Luck!
2007-11-20 09:52:12 · answer #6 · answered by peaches6 7 · 4⤊ 0⤋
If you lease a car you can always trade it in for a newer one. My uncle does it every 6 months because he puts too many miles on his truck, that way he doesn't go over the 100,000 mile warranty.
2007-11-20 09:49:38 · answer #7 · answered by keshia! 1 · 2⤊ 0⤋
you pay less gas has some kind of diffreence and taxes and insurance is different i think leasing is better unless your looking for a permanant car
2007-11-20 09:49:45 · answer #8 · answered by Anonymous · 2⤊ 3⤋
from the book called automatic millionaire( David Bach ) said if u lease then u are spending more than u should in three years than owning a car.
guess what i saved 12,000 dollars from it.
2007-11-20 09:58:10 · answer #9 · answered by KAR 2 · 2⤊ 4⤋
Leasing is throwing money away.
2007-11-20 09:49:04 · answer #10 · answered by nosillenhoj 4 · 2⤊ 4⤋