Question

Lease or buy?

The choice between buying and leasing has often been a tough call. On one hand, buying involves higher monthly costs, but you own something in the end. On the other, a lease has lower monthly payments, but you get into a cycle where you never stop paying for a vehicle.

Whether you choose to buy or lease your next car depends wholly on your goals, budget, and personal preferences. Both buying and leasing cars have their costs and benefits; the key is determining which is most suitable for you.

Do some research on the cost and benefits of car buying vs. leasing and reply to this discussion thread answering the following:

1) List 2-3 benefits of buying and 2-3 benefits of leasing.

2) After your research, which option is better suited for you (buy or lease) and why?

3) Cite the sources of your research

Answer 1

Ans :

1). Benefits of leasing :

a). Tax benefits : If we intend to use the car for business, we can typically write off the entire lease payment as a tax deduction. And even if we don't own a business most states is only tax on the usage portion of of lease, means we don't have to pay taxes on the full amount of vehicle.

b). Drive the latest cars : A lease allows to drive a new car in every 2-3 Years, giving the benefit of enjoying the latest technological advances and safety features.

c) . More choices of vehicles : When we lease a car , we don't have to worry about it's realiabilty or quality, because we are only going to be driving it for 2-3 years.

Benefits of buying :

a) . Discount the depreciation : Depending on the vehicle 20-40% of it's depreciation can occur within the first few years. So, when we buy a 2-3 year old vehicle, we get advantage of paying a price that reflects a substantial depreciation discount.

b) . Have the option to sell it : As a car owner we have the flexibility to trade or sale it at any time. We are never locked into a fixed ownership period like with a car lease.

c). No mileage limit : When we need to drive a vehicle as many miles as we want, it's much better to own it. Leases put caps on number of miles we can drive and charge a hefty fee when we exceed the limit.

2). I think leasing is a better option, leasing a car is usually less complicated.

Leasing allows to use the asset immediately without paying a hefty amount upfront.

Amount per month is usually 30-60% lower than buying option.

Once lease is over we don't need to worry about selling the asset. We simply return the asset to dealer.

In leasing we would be able to save more taxes.

If Lease for 36 months or less than we are typically covered by the manufacturer's bumper to bumper warranty during entire lease.

In leasing we would able to save more taxes.

3). Sources of research :

Buying or leasing depends on consumer's preferences. Buying means once we finish making monthly payments, we will own the car. It will be our asset. If we lease make sure we understand all costs during the lease and at the end.

Compare different offers, terms including any mileage limits etc.

Consider financial situation. This can help to determine how much money is available for a down payment and how much we will be able to pay monthly.

Assess savings : Consider how much we'd like to save for a down payment. The larger the down payment, the less we will owe.

Fully research of loan options. This includes monthly payment, length of the loan, interest and any other fees.

Consider additional cost. Don't forget about registration and insurance Costs.