diff btwn buying & leasing a car

[raze]

Besides the obvious of course that you will never actually own it. Payments may be less. What other differences? Just wondering

 

[Lars624]

your mileage is limited

 

[jel0511]

The differences between leasing are that you don't own the car, but are still legally responsible if anything happens. Also, your milage is limited to usually 12K or 15K per year, you mist return the car in good condition and will be charged for any door knicks, dings, scratches, etc. When you lease, you pay for the usage and depreciation of the car, not the entire purchase price. Leasing is advantagous if you plan on getting a new car every 3 or 4 years. If you the type to keep a car more than that, you're better off buying.

 

[FOJMO]

Since others have alread pointed out the differences, let me just add my two cents in favor of leasing.

We have leased ALL of our cars for the past 15 years. We wouldn't buy a car anymore after leasing.

Of course, we knew that we would probably NEVER not have car payments, so we thought we may as well have a new car every few years and pay a lease payment.

We have NEVER had to have a car repair on any of our leased cars. Even if you do, your lease period is almost always the same time frame as your new car warranty, so it's very much to your benefit. In fact, until a few months ago, we were still paying on car repairs from cars we owned 20 years ago!

Good luck in your decision, but for us, leasing is the only way to go!

 

[ahutton]

Also, at the end of the lease you can decide to purchase your car. Often because the leasing company does not want to have to take possession and sell it they are very flexible on the price and even offer good purchase terms/financing. When our lease ended we had a new DD and could not afford to keep the car, but they offered us financing at 2.95% to try and encourage us. If there had been any way I would have done it!

 

[KarenC]

We've had a Chrysler minivan for 11 out of the past 15 years. We like the car, but they tend to have expensive things go wrong with them about the time we pay them off. In 2000, when our 1995 needed a second round of expensive air conditioning work, we traded it in and decided to lease. Our payments were about $200/mo less than they would have been had we bought the car.
We don't put a lot of miles on our cars, and take good care of them, so we weren't worried about the costs of turning it in at the end of the lease.

When it got to be time to turn it in, the used car market had changed dramatically. The actual value of the car was nearly $5000 less than the residual value on the lease. That meant, the residual on the new minivan was much lower. This time, the difference in payments between leasing and owning was negligible. We decided to buy this time. Between low rates and cash back, we really got a good deal. We got the same model as we were replacing, with additional features of a moonroof and DVD system, and I think the bottom line price was nearly the same as what we negotiated on our lease 3 years ago. And we thought we got a good deal that time!

The trick with leasing is to find a car with excellent resale value. That tends to keep the payments low. From an economic standpoint, we would have done better with a different vehicle, but the features on the car we bought were right for our family. It wasn't a pure economic decision for us!

 

[Lewski709]

I prefer to buy and pay off quickly. I hate to make payments and the thought of making payments forever drives me insane. If you are ok with making payments and don't drive a lot, as stated.....it is nice to have a new vehicle every 3 yrs. Sometimes you can get 24mo leases. I only drive about 8k-10k/yr. I wouldn't loose out on a lease as far as the miles go.

Details to consider:
We bought 5 vehicles in the last 6yrs. Sold two of them outright and two we lost some $$$, because of the economy (Taurus sold 5/04 for $6k with 28k miles and the Chevy S10)....but it happens. Bought a Sunfire in 1997 ($16k) and traded it about 2 yrs ago (got $8k), got an average deal on a closeout NEW Ford Taurus in 2000 ($15k) that was a leftover. Bought a NEW 1997 Chevy S10 extra cab ($16k), sold in 10/03 ($5k). Got a GREAT deal on a used 99 Ford F150 extra cab in 2/03 ($15k). Bought a 99 Dodge Durango that was on a corp lease ($15k) from ebay. JSDmotors and I highly recommend them. This vehicle is excellent....has EVERYTHING and came low miles and the deal was great.

Bottom line.....won't buy another NEW vehicle, ever.

BTW...the reasons for the changing so much was family expansion.

 

[Tinks]

I'm not too familiar with leasing, but I did do research on it a couple of years ago and I found out that if you live in Illinois leasing is NOT a good idea...something about the payments and insurance and taxes...ugh I wish could remember the details...but suffice it to say if you live in Illinois, do your research really well...the general advice is to buy your car.

 

[mudnuri]

My Grand Am is a lease...Picked it up in March of '03. I have a 36 month 45,000 mile lease. Gives me 15,000 miles per year.

My payment is about 1/2 of what it would have been new, and it would have still be more per month even with a 72 year buy option...also- ZERO down, and no downpayment/trade in..I did NOT hand over ANY cash...

The miles are not a biggie for me, as DH has the Crew Cab, that fits us all fine, plus I have my Full Size Blazer that again, we all fit. I will trade in my lease at 30 months- thats 6 months early, with no penalty.

By the way- its EXCESSIVE wear that you are charged for, not door dings, knicks etc... they mean, burn holes, stained seats BIG dents etc... this is the 5th car I've rented, and NEVER have I paid for wear/tear. All though, it is proffesionally detailed every 4 months or so.

I'll keep on leasing, my next lease will be a Cadillac Escalade EXT...only problem is we'll probably never drive the other trucks, and rack up some serious miles!

Brandy

 

[Dan Murphy]

IL leasing downside is that sales tax is paid on entire price of vehicle, not the lease payment. Since the reciprocal of the residual value is what you are actually using, in IL, you also pay tax on the residual, the part you 'are not using'. That said, I have leased our vehicles for the past good number of years, for all the reasons above. Additionally, if you can expense any or all the cost as a legimate business expense, the depreciation tax rules and benefits are generally more favorable with leasing.