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Is It Better to Lease or Buy a Car: Budget Savers

Updated on February 24, 2012

Is It Better to Lease or Buy a Car: Budget Savers

SAVE MONEY ON A CAR! Is it better to lease or buy a car? That's a good question. This site is dedicated to saving you money on a car. Budget Savers does not try to sell useless contraptions. It does not try to sell information about leasing or buying a car that’s already available for free. If you want to save money on a car, you’ve come to the right place.

It's always alluring to rent a car, because it seems like you're saving money. There are a lot of considerations though. This site helps you compare actual costs, net assets, and the real value of car leases. Before making this decision, make sure you read this site, and do your research!

Is It Better to Lease or Buy a Car: Budget Savers

  • Comparison shop for the best leases.  Most people shop for the best deals when they go to purchase a car, but they seldom shop for the best leases.  Start your comparison shopping with
  • Purchasing is usually better than leasing. Leasing often appears to be less expensive than purchasing. Lease payments are lower than purchase payments, because you don't actually own the car. Because of this, you should generally purchase whenever possible. There is one caveat to this. If you are good at investing, why not lease a car and then invest the money you would have spent on a new car. If you fall into this category, check out the leasing calculator.
  • Avoid hidden fees when you lease. As with purchasing a car, leasing a car is very complicated. There are many factors to consider. Fees are always something you’ll need to consider. Typical fees include excess mileage, wear and tear, and end-of-lease fees. Perhaps the best source of information about auto leasing can be found in Keys to Vehicle Leasing: A Consumer Guide. This guide, published by the Federal Reserve Board and Federal Trade Commission, is free and very informative.
  • Before leasing, check out the Edmonds car lease calculator to determine the actual value of your potential lease. While you are there, you can also check out the Edmonds loan calculator to determine whether it's a better deal to buy or lease.
  • If you enjoy getting an new car every two or three years, leasing is probably the least expensive way to do this.
  • If you keep your cars for a long time, don't lease. Purchase your car.
  • If you drive less than 15,000 miles a year, buy a car. When you lease a car, you typically pay for 15,000 miles a year. If you don't drive that much, you just paid too much. If you drive more than 15,000 miles a year, make sure you negotiate this into your contract. Otherwise, you'll be paying by the mile once you exceed the 15,000 miles. This is very expensive.
  • If you are using the car for business purposes, lease. Tax laws allow for greater deductions on cars that are leased. When you claim your deductions, you'll save more money on a leased car than a car you purchased.
  • If you are kind of hard on your car, lease. The dealer expects some minimal damage. This doesn't mean you can trash a leased car. If you do put excessive wear on a leased car, you'll end up paying more in the long run.
  • If you baby your car, consider purchasing it. Cars that are maintained better hold their value. Again, let the dealer take the loss if you're kind of hard on your vehicle.
  • If you plan on getting a car that has significant depreciation, consider a lease. Let the dealer assume the loss of value.
  • If you plan on getting a car that holds its value, consider purchasing the vehicle. Once purchased, you'll have a valuable asset.


Cars: Lease or Buy?

Do you lease a car? Did you purchase a car? Why?

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