Posted: 3/1/2008 10:14:09 AM EDT
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Without opening up a can of worms and contacting a salesman, I'd like to get some information on what, exactly a lease is. How does it differ from financing? And what would be the benefit of a lease? Most I see are for two years; you put a certain amount down, and pay a certain amount per month. Then after two years ... what? You turn the car in? Get a new one and start it over again? Can you keep the vehicle and keep making payments to eventually own? What's the deal? I don't think I'm ever going to figure out the problem with my Toyota Pickup, so I'm thinking of possibly setting my eyes on a new Tacoma. |
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Leasing is one of he most expensive ways to operate a car. It is a nice way to drive what you might not be able to otherwise afford, but you lose money in the end, lots of it. You cannot drive as many miles as you want, and are still responsible for maintenance. Its a poor choice, IMHO. For every person who doesn't get robbed on a lease, there area hundred who do. |
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If you always want to have a new car (3 years or less old) and will keep buying and trading in or selling the vehicles you buy after 3 years, leasing is for you. You will normally pay less as you only pay for the use of the car, rather than own it. At the end of the lease you just turn in the vehicle and get lease another one. You have no equity in the vehicle, but your payments are lower. Now if you are a business owner, leasing a business vehicle can have very beneficial taxes benefits. See your tax person about this. In other words, if you always are going to have a car payment and always want to be in a newer car, lease. If you own a business and can use the lease to your advantage, lease. Otherwise, no. Edit: At the end of a lease, you have th option of getting a conventional loan and buying the vehicle instead of turning it in. There are also miles that you must stay below. The reason for this is because your lease payment is paying for the use of the car, not ownership. Therefore you are restricted to a certain number of total miles. You can always pay for more miles if you think you will need them. Normally up to 15,000 per year. |
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The trick is to find something with a high residual value. If you lease something like an Accord or Mini Cooper, you get a hell of a lot of car for the money. Leasing a Range Rover that depreciates like a brick is not such a good deal. You also do well if you lease something that includes scheduled maintenance like BMW or Mini. One less thing to pay for in the end. |
Pretty well put. |