Car Buying
Auto Loans and Financing

How is car leasing different from buying?

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2014-07-28 18:57:55
2014-07-28 18:57:55

In simple terms, an auto lease is a long-term rental.

When you lease a car, the lease agreement you sign specifies how long you have the car and how many miles you can drive during this time period. A popular lease term is 36 months (3 years) and 12,000 miles/year (36,000 miles). You are not prevented from exceeding this mileage, but you will pay a per-mile penalty for every mile you are over (as defined in the lease agreement). Once the lease agreement expires, you must return the car to the lease company or purchase it from them at a pre-determined amount. The car also must be returned in good condition with only "normal wear and tear". A fee may be charged if the lease company feels the car's condition is worse than expected.

Leases are often much cheaper than a traditional loan because the actual dollar value being financed is much lower. When you purchase and finance a car, the loan is for the total purchase price. For example, let's say the car you want has a purchase price of $25,000. With a traditional loan, the loan amount will be $25,000 (less any down payment), broken up into a monthly installments over the lengh of the loan. If you lease that same $25,000 car, the actual dollar amount financed may be less than half the retail price. A lease basically covers the value that you will use over the lease term, verses the actual cost of the car. The buyout option at the end of the lease would typically be the remaining amount not financed.

One common misleading statement about leases is that you do not own the car. While this is true, you don't actually own the car while you finance it either. When you finance a car, you only truly own it after your loan is paid off and the finance company provides a copy of the title in your name. While you are paying the loan, the finance company owns the car. The same is true for a lease. The biggest difference here is that a financed car will be registered in your name, whereas a leased car will be registered in the lease companies name.

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Related Questions


The choice of either leasing or buying a car depends on the original price of the car; depending on the price, either leasing or buying can be the better option. However, buying a car is usually cheaper than leasing it.

You can find out about leasing versus buying a car on How Stuff Works. Other places with info about leasing versus buying cars is dmunds, and NN's site as well.

When you have paid off the loan the car becomes yours. When leasing a car it never becomes yours.

Buying a car has many advantages as well as disadvantages. Opposed to buying a car you have to pay a lot of money compared to leasing. In the end, it all depends on the balance of your bank account and how much do you think you should spend.

IMO, Avatar Vehicles is the best option. They offer Car Leasing, buying in Scotland.

it depends on how much you are going to use the car because if you just go to work and back leasing but if you are going to use it everyday then i would buy a car but it really depends on what your budget is =]

Raul A. Delgado has written: 'Car Buying and Leasing Exposed' 'Everything you always wanted to know about--car buying & leasing, exposed--but no one would tell you until now' -- subject(s): Automobiles, Purchasing

There are many arguments for and against leasing over buying and visa versa and as such it is ultimately subjective. That said the benefits of leasing over buying outright is the option to change the car more frequently andnot having to pay out one large lumps sum. If at the end of the contract some companies then would offer to sell the car for a reduced cost as the depreciation of the car would be taken off the initial cost of the car when it was first entered into leasing.

In every state, there are different terms in the lease agreements. Between car dealers, there are also different terms. Overall, in general, it will be the same process.

With auto leasing the monthly payments are usually lower than they would be if you were buying the car. You can upgrade sooner, or more often with a car lease. However, you will usuually pay more interest with a lease and you will not own the car, therefore you do not generate any equity. To calculate the costs of leasing versus buying online, visit:http://www.leaseguide.com/leasevsbuy.htm

Buying or leasing is a personal preference. There are advantages and disadvantages to both ways. In leasing, you use the car for a specified number of years, making payments on it just as you would if buying, except that at the end of the lease, you return the car to the dealership and basically walk away owing nothing more. When purchasing/buying, one assumes all the costs of maintenance as well as depreciation values.

Check online for a local car leasing company.Check online for a local car leasing company.Check online for a local car leasing company.Check online for a local car leasing company.

What Car dot com offers real in depth information on car leasing from the pros to the cons for different types of leases. Also check out Money Supermarket dot com for a complete guide to car leasing and a directory of car leasing providers.

Buying a used car can be a great way to save money. However leasing may also be a good option to look in to.

Leasing is basically renting. Payments are usually cheaper, but you don't actually own the car. Many times with leasing, you are also REQUIRED to have maintenance done regularly and only done at dealer-approved businesses. If any damage is done to the car, you will be required to pay for repairs. When you buy a car, you make payments until the car loan is paid off, and then you own the car outright.

Leasing a car is more easier because you only have a certain time frame to keep the car. Buying a car is worse because you will permanently have that car and waste a lot of money on it.

It depends, if you are buying a house in cash, it won't of course. Else, it would quite affect as it would be part of the assessment on your credit and liabilities that the mortgage company will do.

The best place to find car leasing in Ireland for a cheap price is Carleasingireland. This is the main place where you can find car leasing information.

When you lease a car, you don't own it as you do when you buy one with a loan. When Leasing you are only paying for the time you use the vehicle, Imagine the Car cost $10,000 when the car is returned in 3 years time the finance company may say the car is going to be worth $5,000 you are only financed on the remaining $5,000 thus making your monthly payments cheaper, where as if you buying the car outright then you will be financed for the whole car, add in its depreciation it often works out cheaper to lease the car

The best way to do this is to comparison shop until you find the car you want at the leasing rate you can afford. Most car dealerships offer leasing so it is a matter of car choice.

The best online site to go on for company car leasing is the official lease guide site. They offer a lease calculator, a car leasing guide, leasing pros and cons, a lease formula, and many other features.

The only advantage would be the intitla cost is less when leasing rims and tires.

When buying a new car, you can research the different models by going to the car company's official website online. In the website, you can find specifications on each car model.

There are many advantages to leasing versus owning a car. Many people think it is more economical to lease a car because the monthly car payment is much lower. Leasing a car allows you to drive a new car and not have to worry about repair bills. You will find most dealerships have affordable car leasing programs. Most leasing program contracts are for three years. A new car warranty usually last for approximately three years. This fact makes leasing a car a very attractive option. Leasing versus buying a car comes down to a lifestyle choice. If you would rather drive a new car every few years, then leasing a car would be a great option for you. Some people want to know they have ownership of their vehicle after a few years. You have to consider your preferences when you are trying to decide whether to lease or buy a car. Make sure you understand the details of the leasing contract before you sign. Most leasing companies allow for a specific set of miles that can be driven without charging you extra. If you go over this predetermined number, you will pay extra fees at the end of your lease. You can expect to pay a down payment when you lease a car unless you can find a sales promotion. Even though you will have to initially pay more money upfront, your car payments will be much lower than if you purchased the car. Many people prefer low monthly car payments and driving a new car versus the responsibility of car ownership. At the end of your car lease, you can choose to trade in the car for a newer model. The main benefit to car leasing is not having to worry about having car trouble. To find the right car leasing plan for you, stop by a car dealership to learn more. Many dealerships offer sales and promotions at certain times of the year. It is also easier to qualify for a car leasing program than trying to buy a car. Depending on your credit rating, leasing a car may be the perfect financial decision for you.

There is a lot of choice when it comes to leasing a car in the UK. A popular company is Contract Hire and Leasing, Lease Cars Direct and Car4Leasing.


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