Leasing vs. Owning a car?

Question

As a 22 yr. old college grad., is it better to lease or own a car? I have 2 grand to put down and can pay $250/month.

Answer 1

Leasing is just another name for LONG TERM RENTING.

Do you want to own or rent?

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If you stay here and watch the questions, you would be shocked at how many people have problems with lease contract.

Good Luck...

Answer 2

Leasing is better for people who have settled down and won't likely want to end the lease early. Leasing is designed to be completed as scheduled, and that's where many people have a problem with leasing -- when they decide they want out or want another car before the lease is completed. It's expensive and troublesome to end early.

Leasing is best for people who drive only an average number of miles -- about 15K miles per year, take good care of their cars, and don't want to customize their cars.

Leasing is not renting. It's not the same as apartment renting, or apartment leasing, or car renting.

Leasing has lower payments than buying with a loan -- same car, same term -- but the tradeoff is that your payments only pay for the car's depreciation over the time of the lease. Unlike a loan, you don't pay extra money each month to build up some ownership equity.

Even with a loan, a car depreciates and you never get back or "own" nearly as much as you paid in to it. The amount lost to depreciation is the same amount that someone who leases has lost. Cars don't distinguish whether they are being purchased or leased.

A simple example would be someone who leases and pays $300 a month for a $20,000 car for 3 years. For the same car, same time, buying with a loan would be about $600 a month. The value of the car depreciates to about half it's original value in 3 years. Therefore the person who leases returns the car, now worth $10,000, to the lease company after 3 years but has no owership, because they only paid half as much per month. The person who bought with a loan, paid twice as much per month now has ownership in their car, but it's only worth $10,000. Half their monthly payment has gone to depreciation, and half to building ownership equity. This example is a little simplified but makes the point.

Generally, leasing is not a good idea for someone who has just graduated, has a lifestyle that is likely to change (get different job, get married, have children), where mileage can't be predicted for the coming few years, and may want to hold on to their cars for a few years until finances improve.

I suggest you find a good used car to buy and possibly consider leasing at a later time in your life.

Good luck.

Answer 3

It depends. in leasing at the end you can buy although this might cost more than buying it straight out cause youll need to pay taxes fees and bunch more. Then of course you can pay the price of the car as a whole always cheaper or put a piece of the price and take out a loan then youll be dealing with interest. So it depends on which is cheaper.

Answer 4

leasing means u will never get ur money back

owning means one day you will own what you work so hard to pay for

Answer 5

Like any other decision, you would have to weigh the pros and cons of both options. For car buying, you get to own the car and when you want to sell it, you would have to look for a buyer yourself. For car leasing, you would have to pay monthly for the car and the car is under contract for years but it won't be yours. In the end of the lease, you would have to return the car. Of course there are a lot of lease types you can avail of. There's what we call a Swapalease. When right in the middle of the lease, you would like to give up your car, you can transfer all the responsibilities to another individual who wants to continue the lease for you. Another option would be the subprime lease. This is offered when you have a bad credit history. The lease payment would be reflective of your credit. I suggest that before you decide between buying or leasing, try to measure your needs as well as your capacity.

If you need more info regarding car leasing, try these web sites:

http://www.carleasingsecrets.com...

http://poddcars.blogspot.com/

http://carmoneylogues.blogspot.com/...

http://cartipsnetwork.blogspot.com/...

Answer 6

Owning

Answer 7

leasing the car your paying like your owning the car but your only keeping it for your lease and your stuck with it for that long and if you get it dont like the car its harder than h**l to get out of and you lose alot of money owning the car its yours you pay for it but if you want to get rid of it you get thousands more for it and you can get out of the car alot easier

Answer 8

Basically it a tax and finance question.  Dust off you accounting text and look up current tax law, run a few scenarios in MS Excel; and the answer will be obvious.