Leasing Car Vs Buying
Join 1000's of Authors at StreetArticles Today!

Leasing Car Vs Buying

Alright the age old question "Leasing car vs Buying"!

So, you finally took a little bit of time to sit down and figure out your finances. After all your hard work and budgeting you can finally afford that new car you've been dreaming about for months! There is just only one thing to consider, Should I Lease the car or buy it. Before you make this difficult decision there are a few things you should consider.

1. Do I plan on keeping this vehicle more than 3 years?

2. Can I get an Auto Loan?

3. How many miles do I drive every year?

Now, with everything considered here are some facts about Leasing a car. A lease is a contract by which you (the lessee) borrow the car for a specified time, in return for a periodic payment. Now you maybe thinking to yourself, "Why do I want to borrow the car when I can own it?", There are a few things to consider when leasing a car vs buying one.

1. Lower monthly payment: Lease

Although you maybe "borrowing" the car from the dealer your payments are usual 40% less than if you took out an auto loan on the exact same vehicle. This is because they charge you no interest and also discount the payment to get you hooked on a new car.

For Example: A 2014 BMW 528I (MSRP: $49,500) would be approximately $578 to lease per month for a 2 years lease. On the other hand to buy the exact same vehicle would be considerable more at $849 to finance per month both with the same down payment.

Leasing is a great way to cut down on your expenses in the short term.

2. You want a new car every few years: Lease

If you're like me, you need the coolest and newest car that is coming out next year! If your currently leasing a car you could be only a few months away from being able to get your hands on that baby. You could always sell off the car if you decide to finance through an auto loan. However, be prepared to take a hit because cars have decaying value as time goes on.

3. You drive, A lot!: Buy

If however you frequently travel, you should considering buying over leasing. Some lease programs will allow you to choose an annual mileage program of under 10,000- 12,000 or 15,000 miles. The number of miles increases the payment of the lease. On our particular model (2014 BMW 528I) the price rises from $578 per month (12,000) to $604 per month (15,000).

If you choose a 10,000 mile plan and you go over that mileage they will charge you 25-35 cents per mile you are over. That will definitely add up , especially if you frequently travel long distances.

4.Long Term Ownership: Buy

Leasing is great! especially if you could afford it, however Leasing in the long term will actually lose you money! How is this? Well if you decided to finance a vehicle you would take out a 48 month term (4 years). After 4 years you pay off the vehicle ($56,000 after interest) It is then yours to keep, it is all paid up and your financing is over. If you decide to sell the car you could make back at least half (sell for 26,000) that brings your total to $30,000 you have spent.

If you decide to lease you would spend $23,800 and would not own that car.

Here's the math over a 10 year time period. (Not including insurance, which is higher for leased vehicles)

Lease: 578 x 120 = 69,360 (Leased 3 cars)

Buy: 849 x 48 = 40,752 (own 1 car) can then sell for $8,000 after 10 years = $32,752

So clearly you have some thinking to do. On one hand leased cars are lower priced upfront but, you have to keep the mileage down and the insurance is a bit more expensive. On the other you can finance a car with an auto loan, pay it off in 48-60 months and keep it until you decide to sell it and get something a little newer!

I hope I could help you understand leasing a car vs buying one. For further information on budgeting money, Saving Money and investing money please visit me at

Best Personal Finance Blog

By Josh H


Street Talk

No comments present
You May Also Like
Talking About How to Look for the Delhi Corporate Office
When it comes to choosing a commercial space to start a business, most people will rent rather than buying. Deilhi comes after Mumbai as the economic hub of India and the Asian markets as a whole. There are many firms that have their headquarters situated here. As a political capital…
By: TinaNing in  Finance  >  Leases Leasing   Jul 07, 2014  
0
  Likes: 0

Evaluating Rate for A Cell Tower Lease
Have you ever tried to evaluate the cell tower lease rates where your potential cell site is placed? Assessing cell site lease rates is troublesome in light of the fact that there isn't much similar information accessible to general society. What we can let you know about cell lease rates…
By: Penny Kessler in  Finance  >  Leases Leasing   Nov 27, 2014  
0
  Likes: 0

How to Get A Service Office In Malaysia
Malaysia is a relatively open state-oriented and newly industrialised market economy, which is essential in in guiding economic activity through macroeconomic plans. In this country, there are a lot of cheap labor, so it is an attractive factor for those business owners. Furthermore, the business ownwers can get an affordable…
By: TinaNing in  Finance  >  Leases Leasing   Aug 23, 2014  
0
  Likes: 0

Is There Really Lease Car Deals?
Interest rates have been really low and people have thought, "Why would I lease when I could buy with little or no interest?". Are there really good lease car deals out there? You are either one of two types when it comes to owning a vehicle: You either want the…
By: Mary in  Finance  >  Leases Leasing   Feb 12, 2011  
0
  Likes: 0

How Restaurant Equipment Leasing Works
Some pieces of commercial equipment are better suited for restaurant equipment leasing than buying. Items such as commercial dishwashers, ice makers and coffee makers are more ideal for restaurant equipment leasing than buying. Restaurant equipment leasing can have a vital chunk of change when you want to open a new…
By: Anna Maria Ferramosa in  Finance  >  Leases Leasing   Jan 03, 2011  
0
  Likes: 0

Benefits of Fitness Equipment Leasing
Day by day, more and more people are becoming interested in getting in shape due to the impact good exercise has on their entire well-being. Even though some people may choose to take up a sport and others may opt to go to the gym, a good number of people…
By: Anna Maria Ferramosa in  Finance  >  Leases Leasing   Jan 03, 2011  
0
  Likes: 1

Equipment Leases- Advantages Of Equipment Leasing for Your Business
In general, it would probably be accurate to say that there is a fair amount of confusion for businesses regarding equipment leases. However, the fact remains that for many businesses seeking capital and infrastructure improvements, equipment leasing, usually with an option to own the equipment at the end of the…
By: Neal Coxworth in  Finance  >  Leases Leasing   Jul 03, 2011  
0
  Likes: 0

Kuala Lumpur Office Locations: Picking the Best Venue
Kuala Lumpur is the federal capital and most populous city in Malaysia and remains as the economic and business centre of the country. Furthermore, it is a hub for finance, insurance, real estate, media and the arts in Malaysia. Kuala Lumpur has a world-class infrastructure bundled with a strong capital…
By: TinaNing in  Finance  >  Leases Leasing   Feb 28, 2014  
0
  Likes: 1

Get Advantages Of A Cheap Office Singapore
Finding a cheap office Singapore can be helpful in establishing a successful business especially if the venture is new and just entered the competitive market. For those who start up a new business, it is not easy to find a place for their business. There are lots of things to…
By: TinaNing in  Finance  >  Leases Leasing   Dec 25, 2013  
0
  Likes: 0

What to Consider When Taking A Sharing Office Space
n today's economic situation, the sharing office space is welcomed by more and more small entrepreneurs hoping to cut down the cost. For those who start up a new business, picking this working space is a cost-effective solution as it can help cut down the cost. This space is linked…
By: TinaNing in  Finance  >  Leases Leasing   Feb 28, 2014  
0
  Likes: 0

Article Views: 1551    Report this Article