Should you lease or buy a car?
A lot of people have a bad taste in their mouth when it comes to leasing their vehicles. This is rather unfortunate, because leasing has really changed.
You see, at one point in time there were only two leases available:
Really good leases only offered to businesses
Really crappy leases offered to everyone else (you)
That has changed drastically… now we are all getting the same kinds of leases (as far as I have been able to determine).
Take a look at this breakdown of buying a brand new Corolla VS leasing the same car…
Financing:
Sale price: 18,200.00
Tax (6%): 1,092
Tag/Title fees: 222.95
Monthly payment: $341.20
$341.20 x 60 months = $20,472.01 TOTAL PAID
Now, let’s examine the “Lease to own” option:
Sale price: 18,200.00
Monthly payment: $269.83
35 lease payments: $9,444.05
Buyout price: $10,746.00
Total lease to own cost: $20,190.05 TOTAL PAID
These numbers are current as of July 2nd, 2012 and assume you qualify for available lease specials.
Now check this out… those are the numbers for leasing a car and then buying it out. But what if you wanted to lease a new car two times in five years?
This is where leasing gets really, really awesome…
It isn’t a guarantee, but a lot of auto manufacturers provide special lease-end specials. I have seen several customers come to me with a special letter from their manufacturer offering to let them terminate their lease six months ahead of schedule, with no penalties! In these instances the numbers would look a lot better!
Assume that you leased for 2 1/2 years with the early termination special, and then you jumped into another one right away. You would make a grand total of sixty payments at $269.83 per month… your grand total would come out to 16,190.00!
With leasing, you can be in a new vehicle every 2 1/2 to 3 years and save $4,000 or more!
I don’t want the lease vs finance article to be one sided, as there are a few cons to leasing, but I think the huge savings and the fact that you are in a brand new car every couple of years makes leasing the clear winner.
In the past leasing was an option that very few people would ever even consider. Today we are seeing more and more people taking advantage of the amazing lease specials we have available. You are in a brand new car the whole time, your payments are significantly lower, and you save thousands of dollars over the term of the agreements.
Please note that all of the numbers I have presented are completely conditional and based on credit. Nothing in this article is presented as an offer or a guarantee.
Steven Mietelski is known as Berks Cou