RentToOwn-HouseFinder.com - Lease or Buy? (buy, not finance)?

Lease or Buy? (buy, not finance)?

I want to buy a new car in the range of $30,000 to $50,000 I have the money. However, I can invest that money at a higher rate than the rate I'll get for the lease/finance. I am not a mechanic, so ... engine light to me means: get rid of it. In other words, I wanna get rid of the car within the warranty period (which is mostly 3 years). SO, Leasing is a good option for me. I get the car, I don't have to use my own cash (which I can invest somewhere else for profit), and I don't have to worry about getting rid of it. Now, my question is: why would leasing NOT be a good idea in this case?

Public Comments

It may be the perfect fit for this situation. Just remember if you go over the mileage allowed in the lease or if there is excessive wear and tear you will be penalized at the end of the lease. Weigh your overall pros and cons and remember with a lease you will need a little up front money. Make sure your return on your investment is going to be higher thhan your rate on your lease. Factor in cost and fees to make the investment as well as when you with draw the investment. If it makes sense do it.
The main problem with leasing for most is the money they are left paying after their lease is up. Say they put more miles on the vehicle than the lease was for, then they have an added balance they are left with when they return the vehicle. Then they decide to lease again and run into the same problem. Before they realize it, they have a bill as much as a vehicle with nothing to show for it. If you know for sure that you will be able to lease and not incur any extra charges, then leasing will be for you.
Leasing is a good option if you want to switch cars every 2 to 3 years. The only thing about leasing is all the little cost that cost you at the end. If your someone who drives alot (more) that 12,000) a year than leasing might not be for you. For every mile over most leases charge between .20 - .25cent a mile which dont sound like a lot but can add up really fast. Then you are charged extra for little nicks in the paint, if you have leather your charged for if the leather is wore more than they think it should be. It just little things like that that cost you.
Owning is better than leasing IF : If you own a business, you can expense the value of the car and / or it's depreciation depending 0ver the expected life of the asset. See tax codes for specifics , but here's an example. Think of a Contractor. They own thier vehicles, and get the full use out of them over time. Large Corporations are another example. They get everything they can out of thier "fleet". IF : Non financially, if you fall in love with a particular type / model of car, you might want to own it, becuase you get to keep it. I own an Isuzu VehiCross. It's unique, and has many features that you just can't get elsewhere. Here's a pic of one (same color as mine): http://images.paultan.org/images/vehicross.jpg IF Owning is better than leasing financially. Basically, you could take out a "car loan" with equivalent payment structure as your "lease payments", except that the reversion value of the car would be yours. Over time, owning is better than leasing, especially if you have to put a large cash payment down with lease signing. Leasing is better than owning IF : If you are high maintenance, don't want any hassles, are willing to pay for the higher cost, and just want a new thing every few years. Maintenance isn't your problem. Malfunctions are your problems. Reversion value isnt' your problem. Reliability (except for when you have to deal with physically taking the car in for repairs) isn't your problem. Basically leasing is paying for the service of not having to deal with a car.
Leasing is a POOR option for most people, unless you can figure a way to write off the cost of the lease on your taxes as a business expense. You still have to maintain the car, and pay for license and insurance and any necessary repairs. Otherwise, you're just paying rent on a car for three years, and you don't own anything at the end of the lease period. The best way to buy a car is for cash. If you have $50K in the bank, you should also have an accountant. Talk to him.
If you lease i wouldnt worry about as far as problems ,depending on how many miles you travel they go from 10,000 a year up to like 15,000 a year if not more.With fords i got a extra protection plan for $20 extra a month, they will insure or not hold you reliable for damages up to 2,500, when you turn in the lease.Hope this helps.
You need to talk to you accountant and see if there are any write offs with a lease. The other question is how much driving do you do the over milage charges for lease vehicles are a killer. If you can get 2.9 % financeing and earn 8% on you money great. The key is what vehicle to buy. If you buy a BMW or MBZ and want to sell it after 3 years you will probilbly owe more than it's worth. If you look at a Acura or lexus you will do much better on resale. www.edmonds.com www.consumerreports.com are good sites to check resale. Many times the penalties ensure that the smartest way out of a lease is another lease, enslaving you to lease untill you bite the bullet or roll penalties into a purchase, making for a medeoker deal. Also a check engine light is not a reson to get rid of your car. It could be your gas cap is loose, or bad. Or you may need some minor service. A quallified professional should be able to sort it out rather quickly for a minor fee. Owning a car and keeping it for 8 - 10 years is the best way to keep your vehicle costs down over the long run, if you choose wisely - not a MBZ/Audi/BMW all cars with extremely high cost of ownership. I have spent less than 15,000$ in the last 10 years driving 2 honda accords, used when purchased with 100K miles, sold with 240K repurchase same year accord with 100k and expect to drive it another 100k before selling. Registration fees are also a factor when changing vehicles every 3 years. in your range expect to pay 350 - 500$ per year. I pay 45$ As the vehicle depreciates, so to will the reg fees. Ultimately it's about choice. Sounds like your in the position to make either and be ok, but in the end if $ are your priority, owning a car is usually the best resipe for $ sucess.
When leasing, you are paying for the use of a car when it depreciates the most...in the first three years. If you bought a good quality used car, say one or two years old when depreciation is highest, that still has some waranty left, you greatly reduce how much depreciation you are paying for as long as it holds it's value at trade-in time which is another hurdle as opposed to leasing where you just walk away from it. Finding an exact used car you like can be a problem. Going over mileage can be a problem too with leasing restrictions....a purchased car is not so critical or expensive if you go over normal mileage. Weigh all the options and considerations....write up different scenarios and calculate the choices, costs and benefits.
If you don't go over mileage allowed, "renting miles" (leasing) makes perfect sense for you. That is really the purpose of leasing.
Lease only if you can get a good deal (high price discount, low money factor, and high residual). Otherwise, pay cash, unless you think you'll need the cash quickly for future emergencies, business opportunities or investments. Leasing is a great way to conserve cash for more productive purposes. It's the reason that businesses lease equipment, buildings, and furniture -- because they prefer to use their cash elsewhere.