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Leasing's a finance option where you pay for part of a car you use over a
specific term + a rent charge, taxes & fees. For example: You want a
$20,000 car worth about $9,000 (residual value) at lease-end. Buy the car
& monthly payments are on the entire $20,000 + finance charges & you own
the car at the end of the term.
If you lease the car, payments will be on the amount of the car you
expect to "use up" over the lease term + a rent charge, taxes & fees.
The value ($11,000 here) is the difference between the original cost ($20,000) &
the estimated value ($9,000) at lease end. You don't own the car, you return it at
lease end, unless you decide to exercise the purchase option. |
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The Advantages of Leasing are. . .
• Lower monthly payment
• Less need for cash down payment
• Upgrade to more expensive model
• Drive a new vehicle more often |
• Return car at lease-end & walk away
• Option to buy at a fixed price
• Reduce hassle at trade-in time
• Drive during most trouble-free years
• Keep up with latest vehicle technology |
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The Advantages of Purchasing are. . .
If you buy, the car's all yours - you own it. Unlike a lease,
there are no mileage limits. You make a 10-15% down payment &
pay off the rest in monthly payments. If you plan to drive the car
for more than a few years; consistently drive 15,000+ miles/year;
alter the car's appearance; or feel more comfortable with the idea of
"owning" a vehicle, purchasing is probably right for you. |