Leasing vs. Buying a Car

Many consumers are leasing because it's the only way they can drive a new vehicle. 72% of the people that lease say that if it were not for leasing they would not be able to afford the high monthly payments for the type of new vehicle they want. That is the reason vehicle leasing and leasing alternative programs have become so popular - lower monthly payments. The amount of the monthly auto payment determines which make, model and body style the buyer can afford.

The reason new car lease payments are so much lower is because you are only paying for the time you use the vehicle, not for the potential useful life of the vehicle. In practical terms this means that a monthly lease or lease alternative payment can be lower than the monthly payment required to buy the same vehicle with conventional financing - or, you can upgrade to a much bigger and nicer vehicle for the same payments you would have made with conventional financing. It is important to keep in mind, however, that once the Lease period is up the vehicle has to be turned in.

Vehicle Leasing programs are not for everyone. They are only for you if you would like to drive a new vehicle every three to four years, like the security of driving the vehicle while it is still under the factory warranty, drive a maximum of 15,000 miles a year, need to be able to make lower payments every month, or would like to drive more vehicle for the same money.

A drawback of new car leasing is that you do not own the vehicle. Something else to consider is that with new car leasing you will normally have to pay some or all of the following fees. Acquisition Fee ($300 to $400); Capitalized Cost Reduction (same as a down payment and normally $500 to $3,000); Security Deposit (same amount as the first months payment); Disposal Fee (approximately $250). Another disadvantage to leasing is you cannot turn the vehicle in early - unless you are willing to pay an extremely high penalty.