BUYING

LEASING

ADVANTAGES

Owning a car can be a great investment. If you take care of it, you may not need to buy another car for years, or perhaps be able to sell it for a good price when you opt for something new. Because there are no restrictions, you’ll be able to drive as much as you want. And you can customize your car with accessories, bumper stickers aftermarket performance enhancers or add-ons.

ADVANTAGES

If you like to have the newest gadgets in your car, leasing may be your best bet, as you can regularly upgrade to drive the latest models. Leasing a car is much cheaper than buying it outright, because you’re only paying a percentage of the total price. You won’t have to worry about fetching a good price or finding a buyer for it when you’re done, as the dealership will take it back from you.

WHO OWNS IT

The car is yours. You might pay for it with cash, or make payments under a financing plan. If you’re financing the car, your lender will require you to meet certain obligations, such as monthly payments or a down payment.

WHO OWNS IT

You’re essentially renting the vehicle. The institution through which you are leasing the car retains ownership. Your contract will state you’re using the car for a set amount of time and miles, in exchange for a set amount of money.

UP-FRONT COSTS

Financing a car means the lender or bank will need an initial payment from you, which is usually calculated according to your credit score, among other factors. If choose to trade in your old vehicle, the value of which can be put towards your down payment.

UP-FRONT COSTS

It’s possible to lower the amount of your monthly payments by increasing your initial fee. A lease doesn’t typically require a down payment, but you will have to provide the first month’s payment along with a security deposit, acquisition fee, and any other applicable costs.

FUTURE VALUE

While the value of a new car begins to depreciate as soon as you drive it off the lot, you may be able to sell your car for a fair price as long as you maintain it properly. It’s important to visit a factory-authorized service facility at regular maintenance intervals for this reason. However, even a car in bad shape may be sold for parts or scrap.

FUTURE VALUE

Because you don’t own the car, you will turn it in to the leasing agency at the end of your lease. However, pay close attention to any mileage restrictions or wear and tear guidelines—excessive use may cost you extra when you return your vehicle.

END OF PAYMENTS

You’ll have to pay a certain amount as stipulated in your contract, but once you’re done, that’s it. The institution you borrowed from will send you a Lien Release, which is proof that the vehicle belongs entirely to you and may not be repossessed for nonpayment. The vehicle is now yours.

END OF PAYMENTS

You usually just return the vehicle when your lease ends. However, you may be able to purchase it during or after the term of your lease, or trade it in before the term of your lease is over. If you think you might want to employ any of these options, ask your financing agent about them before the lease is signed

BEST CARS TO LEASE

The total you'll pay for a lease depends on how long you'll have the vehicle and the amount it will depreciate after you've driven it, so the least expensive leases are those for vehicles that will retained their value after the lease is up. It's always a good idea to research lease ratings to see which vehicles maintain the highest value.