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Leasing Or Buying?

Find Out More About What Drives You

Deciding between leasing a car vs buying comes down to two factors: driving behavior and finance situation. Should you lease or should you buy? Let´s break down the advantages of both.

 

Advantages of leasing

 

Lower monthly and down payments

An Infiniti G over a Nissan Altima – Payments on a 2011 Infiniti lease go for $400 a month, $500 less than if you were to finance with an auto loan in the same time period. An average lease is 3 years with around 60% of MSRP paid within this time period. With an excellent credit score, leasees can have as little as $1000 down.  The best deals are had with end of year events where dealers are looking to close up the previous year´s inventory. 

 

Maintenance

Manufacturer warranties cover the entire lease of your car. The standard is 3 years or 36,000 miles, whichever comes first. Buyers are usually issued the same warranty, after which they are on their own. That could mean dealing with a mechanic for 70,000 miles worth of repairs.

 

New factor

Upgrading from a Honda Accord LX to Infiniti G (starting at $31,000) is not as costly as it looks. A standard payment program on the LX runs about $300 a month (including tax with $1500 down payment) on a ¨Tier 1¨ (highest credit history, folks!) and today´s G lease offer is $319/month for 39 months with a $1,999 down payment. Leasing a car every three years puts you in the driver´s seat to driving the latest technology, cheaper than if you were to buy.

 

Advantages of buying

Its yours. With buying a car, you´re making monthly payments towards an asset you can customize, which cannot be done with a leased car.

 

No mileage limits

A car´s mileage is tied to its resale value, which is why leases carry a mileage limit ranging from 12,000 to 15,000 per year (10,000 in rare cases). Leasors assess cost per mile penalties for every mile over the maximum (up to 20 cents per mile). Assume all national tv ads monthly payments refer to 12,000 miles.

 

All in all, leasing is better for people wanting lower monthly payments and the ¨fresh¨ factor in driving a new car every three years. Buying a new car is less expensive in the long term and converts your car into an asset to be sold later. Weigh the pros and cons against your driving behavior and financial situation before committing to lease or buy your next car.