Sign up Login
 

Buying Versus Leasing A Car, Pros and Cons

Posted: // - 12: AM ET

Buying Versus Leasing A Car, Pros and Cons

Just as some people prefer to live in apartments or condos instead of buying houses, many people are choosing to lease their new cars, rather than buying them outright. For some, this is a decision influenced by credit scores - typically, low credit scores get you more money with a lease - but it's a lifestyle choice as well: if you prefer driving newer vehicles, and if you don't mind always having a car payment, leasing can be beneficial. Alternatively, if your ultimate goal is payment-free reliable transportation, or you're in the market for a used car, an outright purchase is probably your better bet.

Used 2003 Buick LeSabre

How do Leases Actually Work?

When you purchase a car, you typically make a down payment, and either pay fees and taxes in cash or roll them into your loan. You pay interest at a rate determined by your lender, and your monthly payments begin a month after your contract is signed. Your loan payments go toward the vehicle's entire cost.

When you lease a car, though, your payments are only going toward the part of the vehicle's cost that you will use in the time you have it. In addition, you have the option of not making a down payment, and, in most states you pay sales tax only on your monthly payments, which include a money factor that is not unlike the interest rate on a loan. In addition, there may also be additional fees, or even a security deposit, and your first payment is made when your sign your contract.

As an example, if you purchase a car that costs $25,000 you pay all of it, plus taxes, fees, and finance charges, but because cars begin to depreciate the moment they leave the lot, 24 months later, that car may only be worth $15,000 if you were to resell it.

If you lease the same $25,000 car, it will still depreciate at the same rate, but instead of paying the entire cost, you only pay for the difference - the part you use - of $10,000 (plus finance charges and fees). This is why leasing is generally less expensive than buying.

Loan payments are made of two parts, principal, which represents a portion of the entire cost of the vehicle, and the finance charge, which represents the interest charged by your lender. Think of interest as the fee you pay for borrowing money.

Lease payments are also composed of two parts, a depreciation charge, which compensates the dealer or leasing company for value lost during the lease (again, it's the part of the car value that you are using) and a finance charge, which is interest charged for the lease company's investment in your car.

Differences between Buying and Leasing

The obvious difference between purchasing and leasing a vehicle is this: at the end of the loan term, you own the car, but at the end of a lease, you have to either return the car, and lease another, or buy out the remaining balance of the car's value (also known as equity). One of the benefits of leasing, however, is something called gap insurance. Gap insurance, which you pay for, insures the difference between the value of the car, and what you owe on your lease, which can be extremely beneficial in the event of a serious accident that results in above-average damage to the vehicle.

Because of depreciation, if you are buying your car, you may find yourself in the position of owing more on the loan than the car is actually worth, and while gap insurance can, in theory, be purchased separately, it's extremely difficult to find an agent who sells it.

New 2007 Buick Lucerne

So, Does this Mean Leasing is Better?

With the obvious benefits of smaller monthly payments and gap insurance, it may seem that leasing is the perfect choice for everyone, but that isn't necessarily true.

Certainly you should consider a lease if the car you want is more expensive than you can easily afford (more than about $30,000), or if you have slightly dented credit, or limited cash for a down payment. Leasing is also an excellent choice if you prefer to have a new car every three or four years, but remember that when you lease, your car payment is with you forever. Also, if you frequently drive more than 15,000 miles a year, leasing can cost you money, as excessive mileage incurs extra fees when the lease is over.

Damage, too, costs extra when you turn in a leased vehicle - anything over and above 'normal' wear and tear can incur fees.

Buying, on the other hand, is a better choice if you want reliable transportation without a car payment, or if you're considering the purchase of a used car. Since most of the depreciation occurs in the first few years after a car is built, leasing a used car may not save you money. And just as extra mileage costs money when you lease, if you frequently make long trips, purchasing your car may be the way to go.

Fundamentally, just like choosing a house in the suburbs, or an apartment in the heart of a city, the decision to lease or buy is a lifestyle choice. Whichever you decide, however, make sure that you get quotes from more than one lender or lease company, and read all the fine print before you sign.

M.A. Bartell

Article Archive
New Car Dealers
Used Car Dealers
Car Rentals
Car Insurance
Guest
guest avatar
Posted on: January 31, 2013 at 10:47 AM
What are the pros and cons of buying a Nissan versa car (used) at a volkswagon dealership? Does it matter where its from?
0
Flag for Abuse|
Guest
guest avatar
Posted on: December 26, 2013 at 4:49 AM
Guest
guest avatar
Posted on: January 8, 2014 at 8:02 PM
- IWC Repliche Orologi Portoghese Cronografo classiche in acciaio. Per anni, i portoghesi a IWC fatto gli amanti del sogno di eleganti cronografi. Replica RolexReplica orologi per gli uomini ora svolgono un ruolo significativo nel ...rolex tag heuer omega iwc hublot patek philippe officine panerai cartier.
0
Flag for Abuse|
Guest
guest avatar
Posted on: February 6, 2014 at 8:11 AM
For me, buying is the most efficient way of getting a car that you want, leasing is a little off. - Nationwide Relocation Services
0
Flag for Abuse|
Guest
guest avatar
Posted on: February 9, 2014 at 4:25 PM
Hello 2014 :occhiali da sole ray ban - fitflops pas cher - Kate Spade Outlet - Michael Kors Outlet - foakleys - Cheap Oakley Sunglasses -Kate Spade Outlet - - ray ban solglasogon - Michael Kors Vaskor - sac lancel pas cher - longchamp pas cher - lunette ray ban pas cher - New Releases Sunglasses - Oakley Active Sunglasses - Oakley Antix Sunglasse - Oakley Asian Fit Sunglasses - Oakley Batwolf Sunglasses - Oakley C Six Sunglasses - Oakley Commit Sunglasses - Oakley Crankcase Sunglass - Oakley EK Signature Sunglasse - Oakley Eyepatch 2 Sunglasses - Oakley Flak Jacket Sunglasses - Oakley Frogskin Sunglasses - Oakley Frogskins Sunglasses - Oakley Fuel Cell Sunglasses - Oakley Holbrook Sunglasses - Oakley Juliet Sunglasses - Oakley Kids Sunglasses - Oakley Lifestyle Sunglasses - Oakley M Frame Sunglasses - Oakley Monster Dog Sunglasses - Oakley Oil Rig Sunglasse - Oakley Oil Rig Sunglasses - Oakley Polarized Sunglasses - Oakley Radar Range Sunglasse - Oakley Radar Sunglasses - Oakley Special Edition - Oakley Sport Sunglasses - Oakley Sports Sunglasses - Oakley Vuarnet Sunglasse - Kate Spade Wallets - Kate Spade Clearance - Kate Spade Clutches - Kate Spade Handbags - Kate Spade Iphone Case - Kate Spade Satchels - Kate Spade Shoulder - Kate Spade Totes - Michael Kors 2013 - Michael Kors Bedford - Michael Kors Clutches - Michael Kors Hamilton - Michael Kors Hobo - Michael Kors Messenger - Michael Kors New Arrivals - Michael Kors Satchels - Michael Kors Shoulder Tote - Michael Kors Totes - Michael Kors Wallets - Michael Kors Watches outlet Online - Authentic Shop!
0
Flag for Abuse|
Guest
guest avatar
Posted on: February 20, 2014 at 5:14 AM
It is best to participate in a contest for among the best blogs on the web. I will suggest this web site! Hotel Kalisz
0
Flag for Abuse|
Guest
guest avatar
Posted on: March 3, 2014 at 7:55 PM
I prefer buying than leasing, because if you buy the car or fully payed the car, you can save a lot of money. - Roger Stanton
0
Flag for Abuse|
Guest
guest avatar
Posted on: March 25, 2014 at 3:53 PM
Buying is much more preferable for me, because it is more convenient than leasing. - Feed the Children
0
Flag for Abuse|
Guest
guest avatar
Posted on: April 24, 2014 at 6:06 PM
who started out Kelly's eye with christian louboutin outlet the alchemy of your louis vuitton point. "I wished for to see that Corinthian longchamp to ray ban sunglasses work out Gene coach outlet Autry however coach outlet , they drawn insanity workouts us shut polo outlet off to a single Tuesday michael kors outlet to find hogan outlet out Ellie not to coach outlet mention Hilton hogan outlet during one Lancel of longchamp pas cher several Chekhovs along at juicy couture outlet the Gaiety. It prada outlet can celine outlet be true religion outlet an item oakley sunglasses I am ferragamo outlet able to imagine, still, waiting " up ghd flat iron " while oakley sunglasses in the Gods, chi flat iron all the drape getting larger and even realizing until coach outlet this issue is there to Technicolor. ". Let us declare you might have got an adequate amount of web affiliate marketing ralph lauren pas cher understand how also, you red bottom shoes know online true religion outlet marketing rather clearly. In which case louis vuitton you embark upon to longchamp pas cher identify a mcm bags amazing marc jacobs outlet system to encourage, frequently online timberland marketers improve solutions ralph lauren pas cher which they realize an tory burch outlet issue concerning louis vuitton bags often from air max getting and also mulberry while using the true religion jeans system earliest present as gucci outlet well toms outlet as many fully louboutin understand other prada outlet people burberry outlet who definitely have louboutin outlet sampled the item and still have a good option associated rolex watches with it can be valued at because of these individuals. Understanding north face outlet any products
0
Flag for Abuse|
Guest
guest avatar
Posted on: May 7, 2014 at 7:11 AM
Study information related the RX drug Mebendazole, medication uses, dosing, adverse effects, medication contraindications, notification, reviews and consumer indication. Vermox is administered orally in the form of tablets and mainly metabolised in the liver. It is a prodrug that is at worst oxidized to its strong metabolite. The half-life of plasma lasts 8.5 hours. The loss of the cytoplasmic microtubules causes to impaired uptake of glucose by the larval and matured types of the helminths, and devastates their glycogen storages. In the following is the most important data on possible ordinary adverse effects of Mebendazole. These side effects in the main do not happen, but they can. Because each kid responds differently to a drug. Please and also take into account that the adverse effects in class and periodicity depending on the dosage form of a medication.
0
Flag for Abuse|
Guest
guest avatar
Posted on: May 29, 2014 at 10:51 PM
But this scheme is now under review following Monday's announcement, said the BCA and Urban Redevelopment Authority yesterday. They added that any revisions to the scheme could take effect in the second half of the year. Watervale ec
0
Flag for Abuse|
Guest
guest avatar
Posted on: June 18, 2014 at 10:12 PM
According to the Iskandar Regional Development Authority (IRDA), the early announcement aims to boost investor confidence and ensure that Medini remains competitive. The Daleys EC
0
Flag for Abuse|
Guest
guest avatar
Posted on: July 11, 2014 at 9:12 PM
Each feasible proposal will be given a grant capped at $10,000 to help with the cost of developing and test-bedding the prototypes. Awardees will have to match dollar for dollar, the grant received from HDB. North Park Residences Privacy Policy
0
Flag for Abuse|
Guest
guest avatar
Posted on: July 23, 2014 at 12:47 AM
hollister clothing store,michael kors outlet online,coach factory,coach outlet,coach factory outlet,coach outlet store online,coach outlet online,coach outlet store online,coach handbags,coach factory outlet,coach factory,coach outlet store online,official coach factory outlet,hollister clothing,coach factory,coach outlet online,coach factory outlet online,coach factory,coach factory,coach outlet,coach factory outlet,coach factory outlet,coach outlet,coach outlet store online,coach factory,coach factory outlet,coach outlet store online,coach factory outlet,coach factory outlet online,coach factory outlet,coach outlet,coach factory outlet,coach outlet,cheap ray ban sunglasses,oakley sunglasses,oakley sunglasses,tory burch shoes,true religion outlet,timberland outlet,prada handbags,prada outlet,true religion jeans,celine handbags,fitflop fitflops,true religion jeans,fitflop uk,tory burch outlet,valentino,tiffany and co jewelery,timberland shoes,tory burch,true religion jeans outlet,true religion outlet,prada handbags,fitflops,prada outlet,timberland boots,tiffany jewelry,abercrombie and fitch,air jordan,celine outlet,toms shoes,cheap toms,true religion,fitflop shoes,supra shoes,isabel marant shoes,timberland,celine outlet,michael kors outlet online,ralph lauren,toms shoes,isabel marant, cheap jordans,marc jacobs,Polo ralph lauren,tiffany and co,coach factory outlet online,coach factory outlet,coach outlet online,coach outlet store online,coach outlet,coach outlet,coach outlet store online,coach factory outlet,coach outlet,coach factory outlet,coach factory,coach factory outlet,coach factory outlet online,coach outlet online,official coach online factory sale,tory burch,michael kors outlet,michael kors outlet,michael kors outlet,michael kors outlet store,michael kors handbags,michael kors outlet,sac portefeuille,michael kors outlet,michael kors outlet,coach outlet online,michael kors outlet online,michael kors outlet online,michael kors,michael kors outlet online,michael kors outlet,louis vuitton handbags,louis vuitton outlet,louis vuitton outlet,louis vuitton outlet,louis vuitton,louis vuitton outlet,louis vuitton,abercrombie and fitch,abercrombie & fitch,abercrombie & fitch,fitflop uk,fitflops,tiffany jewelry,michael kors,ray ban sunglasses,oakley sunglasses cheap,cheap oakley sunglasses,oakley sunglasses outlet
0
Flag for Abuse|
Guest
guest avatar
Posted on: July 25, 2014 at 5:51 AM
In case of automobile after feature safety will always be in top concern for all car owners and car companies. Our automobile companies are continuing to develop technology to make it more luxurious. When think about a car, first we consider its features, brand and coast. http://goarticles.com/article/Looking-For-BMW-Service-In-Dallas/7956080/ are very important for all car users.
0
Flag for Abuse|
Guest
guest avatar
Posted on: August 8, 2014 at 1:31 AM
Resale prices of completed non-landed private homes slipped 0.4 percent in February from the month before as prices dropped in both the central and non-central regions. Lake Life
0
Flag for Abuse|
Guest
guest avatar
Posted on: August 10, 2014 at 8:04 PM
Resale prices of completed non-landed private homes slipped 0.4 percent in February from the month before as prices dropped in both the central and non-central regions, the amore ec punggol
0
Flag for Abuse|
Guest
guest avatar
Posted on: August 11, 2014 at 8:30 PM
you write a lot of great articel , thanks for share this
konsultan seo konsultan seo muda konsultan seo indonesia konsultan seo muda indonesia
0
Flag for Abuse|
Guest
guest avatar
Posted on: August 24, 2014 at 1:31 AM
wow ... this is a very good article and useful, allow me to share it, I will try to share this link for our mutual benefit.
Agen Bola Online | Agen Bola | Agen Sbobet | Prediksi Bola | Berita Bola | Prediksi Skor | Prediksi Bola | Prediksi Bola | Agen Bola Terbaik | Nonton Film Online
thank you.
0
Flag for Abuse|
Guest
guest avatar
Posted on: August 24, 2014 at 1:34 AM
wow ... this is a very good article and useful, allow me to share it, I will try to share this link for our mutual benefit.
Agen Judi Poker | Agen Poker Online
thank you.
0
Flag for Abuse|
Guest
guest avatar
Posted on: August 25, 2014 at 8:39 AM
شركة نيل للتسويق الكتروني
شركة نيل للتسويق الكتروني
شركة نيل للتسويق الكتروني
نقل اثاث
شركة تنظيف مجالس بالرياض
شركة تنظيف شقق بالرياض
شركة تنظيف منازل
شركة تنظيف فلل بالرياض

شركة تنظيف بالرياض
شركة نقل اثاث بالرياض
شركة رش مبيدات بالرياض
شركة مكافحة حشرات بالرياض
مكافحة حشرات
شركة تخزين اثاث بالرياض
شركة نقل اثاث بالرياض
شركة رش مبيدات بالرياض
شركة مكافحة حشرات بالرياض
شركة تنظيف بيارات بالرياض

شركة تسليك مجارى بالرياض
شركة كشف تسربات المياه بالرياض
شركة عزل اسطح بالرياض
شركة عزل خزانات بالرياض
رش مبيدات

شركة تخزين اثاث بالرياض
شركة نقل اثاث بالرياض
شركة رش مبيدات بالرياض
شركة مكافحة حشرات بالرياض
شركة كشف تسربات المياه بالرياض
شركة تسليك مجارى بالرياض
شركة عزل خزانات بالرياض
شركة تنظيف منازل بالرياض
مكافحة النمل الابيض بالمدينة المنورة
شركة لتاجير السيارات بمصر
غسيل خزانات بالمدينة المنورة
شركة تنظيف شقق بالمدينة المنورة
شركة تنظيف فلل بالمدينة المنورة
شركة تنظيف المنازل بالمدينة المنورة
مكافحة حشرات بالمدينة المنورة

شركة عزل اسطح بالمدينة المنورة
ليموزين الاقصر
ليموزين مدينة نصر
ليموزين مدينتي
ليموزين الرحاب
شركات تاجير السيارات بالاسكندرية
ايجار سيارات كابورليه

ايجار سيارات فى شرم الشيخ
ايجار سيارات فى طنطا
ايجار سيارات فى مدينة نصر
تأجير سيارات لشركات البترول
رقم تليفون ليموزين المطار
اسعار ايجار السيارات في مصر
شركات الليموزين فى مصر
شركة سياحة فى مصر

رحلات الى اسطنبول
رحلات شهر العسل الى تركيا
رحلات تركيا من مصر
اسعار السياحة في تركيا
رحلات سياحية الى تركيا
رحلات الى تركيا
عروض شركات السياحة
شركات سياحة
شركة انشاءات
شركات عقارات

مكتب هندسي معماري
شركة معمارية
شركة معمارية
شركات الاستشارات الهندسية
شركات المقاولات فى مصر
تصميمات فلل
ديكورات شقق
واجهات عمائر
شركة ديكور
تشطيبات شقق
تنظيف موكيت بالمدينة المنورة
عزل مائى بالدمام
شركة عزل حرارى بالمدينة المنورة
تنظيف خزانات بالدمام
تنظيف بيارات بالدمام
نقل عفش الدمام

تخزين اثاث
شركة تخزين عفش
تنظيف بيارات بجدةدهانات فلل من الداخل
شركة تنظيف بالهفوف
شركة تنظيف بيارات بالدمام
شركة تخزين أثاث بالظهران
شركة تنظيف مساجد بمكة
شركه كشف تسربات المياه بالقطيف
شركة عزل أسطح بالمجمعة
شركة عزل أسطح بالخبر
شركة عزل اسطح بالظهران
شركة تخزين أثاث بالخبر
شركة تنظيف تكييف بمكة
شركة نقل اثاث بالهفوف
شركة تخزين اثاث بالهفوف
شركة تنظيف بسيهات
شركة تسليك مجاري بالخبر
شركة تسليك مجارى بسيهات
شركة تخزين أثاث بالدمام
شركة تنظيف بيارات برأس التنورة
شركة تنظيف فلل بالجبيل
شركة تسليك مجارى بالجبيل
شركة مكافحة حشرات ورش مبيدات بالأحساء
شركة مكافحة حشرات ورش مبيدات بسيهات
شركة تخزين اثاث بالجبيل
شركة تنظيف برأس التنورة
شركة تنظيف تكييف بالرياض
شركة تنظيف بالخرج
0
Flag for Abuse|

Add Comment

Guest
Bold Italics Underline Add Link Add Image Quote Embed Video 
Verify you are a human:

Signup or Login to remove this captcha.
Add Comment