Leasing versus Buying a Car
New car buyers are usually faced with two options when they decide to purchase a new car : to buy the car or to lease it . For most families and individuals , purchasing a new car is usually a very big decision that has a significant financial setback . Car dealers usually present car buyers with two options when financing a car purchase : to buy or to lease . While both options cost money both in the short term and the long run , leasing is generally easier on the pockets . On the other hand , leasing does not transfer ownership to the owner , essentially giving the owner nothing of value at the end . What are the advantages and drawbacks of buying as compared to leasing ? What are the situations wherein leasing is the best option for a car buyer ?
Leasing a car is cheaper than buying a car based on the monthly payments . Buying a car means that the buyer will have to pay for the entire cost of the car . Usually , this is done in monthly payments over many months with the monthly payments worth more than the cost of the car divided over the payment term . As the length of the term increases , the increase in Additionally , the owner has to pay the down payment and other costs associated with the ownership of the car . Leasing is more similar to renting where the owner just pays to use the car for the length of the lease term . At the end of the lease , the owner must relinquish the car back to the dealer . While this leaves the buyer with no car at the end of the term , the monthly payments are much less than the payments for buying a car . This is because instead of having to pay for the cost of the car divided over the length of the term (plus interest , the owner only has to pay for the loss of value of the car during the lease period . A lease is cheaper in terms of monthly payments but buying a car gives the owner possession of the car after the last monthly payment . Thus it is obvious that the eventual...
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