Finance Guide Center - Can leasing a vehicle be cheaper than financing a vehicle in the long run?

Can leasing a vehicle be cheaper than financing a vehicle in the long run?

In either situation (leasing / financing), I want to own the vehicle at the end. Therefore, with a lease (after making the lease payments) I'll be purchasing the vehicle's (residual value/discounted residual value). Asuuming that the length of final payoff is the same.

Public Comments

YOU DONT REALLY GET MUCH EQUITY IN A LEASE. AND WHEN IT COMES TIME TO FINANCE THAT BALANCE ITS USUALLY AT A HIGHER INTEREST RATE CAUSE IT IS CONSIDERED A USED CAR. THEN YOU'VE PAID LESS ON IT AS YOU LEASED IT SO YOUR FINANCING A BIGGER AMOUNT AT A LATER DATE. I WOULD ONLY LEASE IF YOU REALLY NEEDED TO LIKE FOR FINANCIAL REASONS.
I guess financing is the better option
Buying would probably be cheeper unless you had all the money now for the car and invested it at a good rate of return.
When I bough my truck I did not have enough of a down payment to get the monthly payment down to where I wanted them. So I leased it for the first 2 years then bought it at the end of the lease. It was not a great experience. I worried about the miles I was driving in case I decided not to buy it later. And when I financed the buy out through my credit Union and not the Ford dealer, the started to add charges to the total buy out. Like inspecting the vehicle, cleaning the vehicle, title issues and tag fees. I had to make on appointment with the Dealers General Manager handed him a check for the buy out and, he finally backed down from all the extra charges the sales department tried to add. Since I was a woman they tried to take advantage, but my Dad was a mechanic and taught me a thing or two about cars and buying them. I may be blond but I'm NOT stupid. Usually it is cheaper in the long run to buy. It you can not afford new, buy something a year or two old, and please have it checked by a mechanic BEFORE you drive it off the lot.
You'll pay more leasing first. Leases have bank fees, termination fees or buyout fees, and in some states (like PA) they have higher tax rates (an additional 3%). Your interest rate will be higher when you purchase at lease end. Also, most people won't keep the total term the same. They'll do a 3 year lease and then a 5 year loan, paying for the car over 8 years. This will cost considerably more in interest.
buying u need a down payment up front and leasing you need it at the end of the lease. i would buy it insted of leasing cause of the fact that if you lease it you really need to take care of it or else you need to pay for all the ding and dents and spillage in the interior. if you lease its like renting a car from avis or some rent a car youll end up paying more for over milage that was put on.
I've worked in the auto retail industry for five years. The answer to this question depends on the specifics of individual leases as well as whether or not you intend to purchase the vehicle or replace it once the lease has ended. You want to be informed of the following when leasing a vehicle. 1. Residual Value 2. Money Factor 3. Mileage penalties 4. Disposition fees A vehicle's residual value is the amount for which you can purchase it at the end of the leasing term. If the residual value on vehicle is $18,000, this is the figure you want to compare against the vehicle's actual retail value when the lease ends. If you can purchase the same vehicle with the same mileage when your lease ends, you are better off turning the vehicle in instead of buying it. The money factor is like an interest rate for leasing. This can cause your payment to be very low or very high. Keep in mind that no matter what your lease payment is, the value of the vehicle at the end of the lease does not change. Mileage penalties can vary between $0.10 and $0.30 per mile you drive over the allowance. Be sure to know what the mileage limitation is up front if you intend to lease. The disposition fee is the cost for turning the vehicle in at the end of the lease. This usually runs about several hundred dollars. I believe the answer to your question is that leasing is more advantageous with a low residual value, good money factor and the intention to stay within mileage and turn it in at the end of the lease. Whatever you do, don't decide to trade a leased vehicle in on a new vehicle before the end of the term!
Financing is always better in the long term.