Should I lease a car?

Question

I have been without a car for a year now. My credit has been in pretty rough shape but I have all my debt paid off now, my score is a little low but going up finally. I am considering leasing because I would love to get a car right now but me and my boyfriend will probably be married by the end of next year and starting to have kids shortly after and when we have kids I would like to get a bigger vehicle so I dont want that car for more than two to three years. Would it be a smart idea to lease a car or should I buy one?

Answer 1

Leasing is just LONG TERM RENTing.  You do NOT own the car.  There's lot of restrictions (like no trade-in, must be return to the place of lease, etc.)

If you are expecting big life change (like getting married, having children), then leasing is even worse - because you don't want to schedule your life around your car lease (like waiting to have children just because the car is too small and you can't return it yet).

Good Luck...

Answer 2

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Answer 3

no if you lease a car then you will be responsible for any scratches dents or interior damages when you have to give the car back. I would just try to find a good clean older car to drive around for now.

Answer 4

Leasing is an alternative form of financing. Both have fixed terms and payments. With a purchase you finance the whole price of the vehicle and pay that amount, plus interest, back to the finance source. With a lease you also finance the full price of the vehicle, and pay all the interest. You only repay part of the principle of the loan. A lease has an estimated value of the vehicle at the end of the lease term.  (Residual value) This is deducted from the principle and you only pay the difference in your monthly payments.

For example:

Assume a vehicle that costs $30,000 and a trade in worth $5000. Also assume you are financing, or leasing the vehicle for 5 years. A final assumption is that at the end of the 5-year period, the vehicle is worth $7500.

With a purchase you would pay back $25,000 plus interest over the period of the loan. You would own the vehicle (worth $7500) You can keep it, or trade it in on a new vehicle

With a lease you pay back $17,500 ($25,000- $7500 residual value), and the interest that is charged on the $25,000.

Your payment is less, but at the end of the term you have nothing!

With a lease there is a limit on the number of miles you can drive and a per mile charge after that. You are also responsible for any and all damage to the vehicle. At the end of the lease, when you turn the car in, you will have to pay for any and all damage and over miles charges!

With both a lease, and a purchase, you are responsible for all maintenance. Some leases, but not many, may have a maintenance program, but that does cost extra, and will increase your monthly payment.