Many people ask if it is better to lease or to buy.
Lease payments are generally $150 a month less than a 60 month finance payment. After 60 months you'd save $7,500. This $7,500 would take you to 7 years as the break even between lease and purchase. After you consider buying tires, brakes and some of the service needed on vehicles with higher miles you could easily agree that 8 years would be the break even point between leasing and purchasing.
If you purchase you've had the same vehicle for 8 years.
Leasing would have given you 3 vehicles with newer technology, safety features, and possibly better fuel economy.
Financially, both ways cost the same amount of money so neither way is better but in terms of risk, comfort and convenience, and always having the newest technology, leasing would have the edge.
Let me explain.
The only real difference between leasing a vehicle and purchasing one is who is responsible for the resale value.
If you lease, the bank is responsible for the resale value and if you buy, you are responsible for the resale value.
If your odometer quits working your car will me labelled as "True Miles Unknown" or TMU. This instantly reduces your car's value by 50%. Would you like to be responsible or let the bank take the loss?
During years 4 and 5 of ownership you have to decide the perfect time to replace your tires and get your air-conditioning recharged. At what point do you decide to replace a tire, after a blow out or sliding in bad weather? How about that air-conditioning? Is it the 90 degree day the air-conditioning quits and when do you have time to get it fixed?
Both of the above examples generally don't exist on a lease.
Every 3 years you get to drive a new vehicle with new tires and usually upgrade technology, better fuel economy, and a full bumper to bumper warranty.
Lease payments are generally $150 less per month than a purchase. Put that money away every month and see what you have in 9 years!
Accountants say to purchase appreciating assets and to lease depreciating assets. I would think a car is the most quickly depreciating asset you'll find.
If you have any questions, any questions, please fill out the form on the right and I'll be happy to get your questioned answered.
Motorcars "Customers for Life!" philosophy means helping every customer make the best decision for their situation.