Posted on: 10-02-07 17:51:45
What are the pros and cons of leasing a new car? Could you share your knowledge on this topic?
Buying a 4 yrs old used car (loan) -Vs- Leasing a new car -Vs- Buying a new car (loan).
Please share your experience.
Which option would be better for a first time car buyer in Canada?
This is one of those questions that does not have a straight answer. So I am gonna give you the obvious answer "it depends". If you plan to keep your car for more than 5 years or so before getting another car, then it is better to buy a car(used or new). If you are the kinda guy who wishes to change cars every 3 to 4 years and does not do a lotta driving (in leasing there is a Km limit) then leasing is a good option.
If you buy a car , after the warranty period you will have to spend from your pocket for maintenance as long as you keep the car. In case of leasing, the dealer will do all the maintenance until the lease period.
There are plenty of websites which discusses the pros and cons of buying vs leasing. just google it. I will leave you with this... no matter what you do... dont lease a car and then buy the same car at the end of the lease period. You will definitely lose a bucket load of money.
Cheers
rsk
Hi,
I have copied a article on lease or purchase it echos what rsk12 has said
Lease vs Buy
It's a common dilemma: lease versus buy — lease or buy a car — which is better?. Everyone who has ever considered leasing has had this question cross their mind.
So what is the answer?
Lease versus buy?
The answer: It depends.
Leases and loans are simply two different methods of automobile financing. One finances the use of a vehicle; the other finances the purchase of a vehicle. Each has its own benefits and drawbacks.
It's not possible to simply say that one is always better than the other because the answer depends on each specific situation.
When making a 'lease or buy' decision you must look not only at financial comparisons but also at your own personal priorities — what's important to you.
Is having a new vehicle every two or three years with no major repair risks more important than long-term cost? Or are long term cost savings more important than lower monthly payments? Is having some ownership in your vehicle more important than low up-front costs and no down payment? Is it important to you to pay off your vehicle and be debt-free for a while, even if it means higher monthly payments for the first few years?
So, making the lease or buy decision is not quite cut and dry. There are things you need to consider. Let's take a look at some of these things.
First, is to understand that buying and leasing are fundamentally different, not just two versions of the same thing.
Buying and leasing are different
When you buy, you pay for the entire cost of a vehicle, regardless of how many miles you drive it. You typically make a down payment, pay sales taxes in cash or roll them into your loan, and pay an interest rate determined by your loan company, based on your credit history. You make your first payment a month after you sign your contract.
When you lease, you pay for only a portion of a vehicle's cost, which is the part that you "use up" during the time you're driving it. You have the option of not making a down payment, you pay sales tax only on your monthly payments (in most states), and you pay a financial rate, called money factor, that is similar to the interest rate on a loan.
With leasing, you may also be required to pay special lease-related fees and possibly a security deposit that you don't pay when you buy. You make your first payment at the time you sign your contract — for the month ahead.
Buy vs lease example
As an example, if you lease a $20,000 car that will have, say, an estimated resale value of $13,000 after 24 months, you pay for the $7000 difference (this is called depreciation), plus finance charges, plus fees.
When you buy, you pay the entire $20,000, plus finance charges, plus fees.
This is fundamentally why leasing offers significantly lower monthly payments than buying.
Quote:
Originally posted by Bird
What are the pros and cons of leasing a new car? Could you share your knowledge on this topic?
Buying a 4 yrs old used car (loan) -Vs- Leasing a new car -Vs- Buying a new car (loan).
Please share your experience.
Which option would be better for a first time car buyer in Canada?
If you own your own business or work independently, it is sometimes more beneficial to lease over buying a vehicle. Many of my friends who have their own business choose to lease because of tax implications.
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Vimal Patel, Realtor
Homelife Royalcorp Real Estate Inc., Brokerage
Cell: 416-887-3745
Office: 905-856-6611
Fax: 905-856-6232
vimal.patel@gmail.com
http://www.vimalpatel.ca" rel="nofollow">LINK
Hi,
This is for someone who would like to have the advantage of buying and leasing a car advantagecombined read on..
http://www.rbcroyalbank.com/RBC:Rc@NYY71A8UAAj3SECU/products/personalloans/royal_buy-back_low_payments.htmlHi,
Quote:
Originally posted by regar
Hi,
This is for someone who would like to have the advantage of buying and leasing a car advantagecombined read on..
http://www.rbcroyalbank.com/RBC:Rc@NYY71A8UAAj3SECU/products/personalloans/royal_buy-back_low_payments.htmlHi,
The link does not have the document.
Hi,
Strange as i saw it before posting it...the message there shows that page has been moved but i found it and here goes the link.
http://www.rbcroyalbank.com/RBC:Rc@NYY71A8UAAj3SECU/products/personalloans/royal_buy-back_low_payments.html
