Think what is important to you, is having a new car in every few years without major repair or dealing the long-term cost of owning it and its maintenance. Think again, is owning the car more important to you than paying a lower monthly payment every month?
When you buy a car, you are paying for the entire cost no matter how many miles you drive it on a daily/yearly basis. Not only that you'll have to pay the finance charges, which are usually between 1-10%. But there is always a cheaper alternate available in terms of leasing it.
What is the difference?
Let's assume you are planning to get a car. Why you buy, you pay for the entire cost of a car but when you lease, you pay for only a portion of a car's cost "The part that you use up during the time you are leasing it" so it makes more economic sense to lease than to buy!
Hence monthly leasing payments are always cheaper, compared to financing the whole cost of a car. However, leasing is typically a cheaper option in the short-run and gives you a chance to get a new car in every one, two or three years. Furthermore, with most leasing agreements you won't own the car, unlike you would if you had it purchased. Thereby, you are most likely to drive the same car for many years.
But there are some leasing agreements that give you a chance to own the vehicle at the end of the term.
What's our view on lease or buy?
Cars always depreciate so our view is lease if you:
Enjoy driving new car every few years
Want lower monthly payments
Like having a car that is always under warranty
Like driving a car that has updated safety features
Don't want to lose your hard earned money on high depreciation cost
Don't want to get into the hassle of trading and selling used car.
And for business, you'd want to free up your cash flow
Sadim Rasheed
CEO
Leaseabout.com Inc., http://www.leaseabout.com/
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