Many of us probably has been told that a car is an asset and being encourage to buy wehn we can pay for it. That’s why it is had to understand why leasing, which involves monthly payments for something you do not own.
For many drivers, leasing allows them to drive a better car than they can actually afford to buy. Many consider the obvious benefit of leasing is the instant gratification of an affordable new car every three years or so. There is also some economic consideration. The term of the average lease is shorter than that of the average loan. It allows us to move onto the next car more quickly, and payments tend to be more affordable than loan payments.
So am I saying that leasing is better than buying?
Well, buying has its benefits, too. You will need to balance your desire to drive a newer car with your tolerance for montly payments to determine whether leasing is right for you. If you drive more than 15,000 miles per year, a lease can become quite costly. Also, if you tend to keep cars for more than five years, or are able to finance for shorter periods, then buying a car may be cheaper than leasing.
So, buy or lease?
It depends. It’s not possible to simply say that one is always better than the other because the answer depends on the specifics of each individual situation. When you make a ‘lease or buy’ decision you must look not only at financial consideration but also at your own personal priorities – what’s important to you.
Please use the following excel calculator to help you decide.
Download:
MS Excel Buy vs Lease Car Calculator
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