Leasing versus buying, which is better? The answer? It's up to you!
Leases and loans are simply two different methods for financing your new vehicle. One finances the use of a vehicle, the other finances the purchase of a vehicle. Each has its own benefits and drawbacks.
It's not possible to simply say that one is always better than the other because it depends on your own particular situation and preferences. You must not only look at the financial comparisons but also at what factors are most important to you.
Choosing whether to lease or buy is an important decision.
If you like to drive a new car every two or three years that's always covered under warranty, prefer lower monthly payments and drive under 15,000 miles per year and want to avoid paying for any major repair work, consider leasing.
However, you should think about purchasing your next vehicle if you like to keep your car for longer than three years, drive in excess of 15,000 miles per year, or one day plan to pay off your vehicle so that you no longer have to make monthly payments.
Here is a general leasing example.
If you lease a vehicle that costs $25,000, and the vehicle will have an estimated value of $18,000 after 24 months, you are only responsible for paying for the $7,000 difference (the depreciation of the vehicle), plus finance charges and applicable fees. When you buy a vehicle, you are responsible for the entire $25,000, plus finance charges and applicable fees. This is primarily why leasing offers significantly lower monthly payments than purchasing.
You are welcome to ask your Finance Manager for examples of purchasing and leasing options.