I’ve had this question come up a lot lately; should I buy or should I lease? Some people would say that to buy the car is the smarter path. I say it depends. There are some situations where I believe a purchase is the smarter option and some where a lease makes more sense.
The biggest concern with a lease is that people don’t want to “rent a car” for three years. Well, it doesn’t exactly work that way. At the end of the term, you will have three options.
1) Buy the car – this option allows you to buy the car for a guaranteed, pre-determined value at the end of your lease. Your lease payments are credited and reduce the amount that you pay. This is the same value that is disclosed to you the day you lease the vehicle.
2) Trade the car – this option allows you to take advantage of any equity that you may have when comparing the payoff to current market value. (See your dealer for details, there are time requirements)
3) Turn the car in – if your life situation changes, or the manufacturers purchase price is higher than the car is worth, you have the opportunity to turn the car in and either lease a new car or buy something different.
I do like the short term commitment aspect of a lease. You’re essentially agreeing to buy the first half of the car. After two or three years, you can make the decision to buy the second half or make a change!