What are the advantages and disadvantages of leasing a car over buying it?

[raz]

I think it's time to get a new car. The one I have has been paid off for a couple of years now (it's great not having a car payment!), but I think it's running on borrowed time. I've put over 150,000 miles on it since I bought it and have never had any major engine work done to it...in fact, I think the only thing I've ever had to do to it engine-wise is put a new thermostat in a couple of times. Other than that...zilch. I have a sneaky suspicion everything is gunna go at once, so I thought I might just get a new car before the problems start.

The question is: Lease or Buy? Are there any major benefits to leasing?

raz

 

[Tominator]

NEVER lease unless it is to your advantage tax wise. In other words, unless you are in business and are advised by your CPA to do so, do not lease.

Individuals signing a lease for a car is second only to credit cards as a trap too many choose to fall in to. You will NEVER owe less on the car than it's worth and in fact you will always owe thousands more!

Leasing was designed to put you in a car you cannot afford in the first place!

There are supberb interest rates available on new cars. It might be difficult to qualify for those advertised rates.

Another rule that most choose not to follow. NEVER have payments that take over 4 years tops. Three years is ideal, but 4 is at the outside. The exception might be the interest rates of around 1% as you effectively are using their money elsewhere and where you gonna borrow money at 1%?

There is a glut in the used car market. That is where you shold look imho..

 

[Ferocious]

umm, err, *cough*

I agree with Tominator completely on this one.

 

[Amused]

It is to your advantage to lease ONLY if your needs and habits meet all these requirements:

You drive less than 12000-15000 miles a year. (amount depending on lease terms. Going over is VERY expensive.)

You buy a new car every 3 years. (If you keep your car longer, you must buy it out of the lease, which is expensive, and you've just paid much more for your car than had you bought it outright)

You keep your car in PERFECT condition. (Every dent, scratch, stain and blemish will cost you if you don't have them repaired before turning the car in at the end of the lease.)

IF you meet these requirements, leasing may be a good idea. Especially if your taste in cars exceeds your wallet. Leasing can be cheaper for the person who trades in often, drives less, and is anal about how their car looks.

If you don't meets these guidlines, DO NOT LEASE. It will end up costing you far more than buying.

 

[raz]

Thanks guys.