Decisions whether to lease or buy a new vehicle is not a simple answer, there are several factors to keep in mind. Do you enjoy owning a vehicle, keeping the car for more than 5 years, driving more than 15,000 miles per year, replacing items before the manufacturer's recommendation (i.e. tires and brakes), enjoy selling a vehicle to see how much you can get for it, or are not bothered that the value of the vehicle depreciates quickly? Answering yes to many of these questions is an indication that leasing may not be the best option for you.

        A big advantage to leasing is that the monthly payments are typically 20% - 30% lower than the monthly payments for a car loan. Although, leasing typically includes some initial costs and restrictions during and after the lease contract. Any initial costs are still lower than the down payment associated when purchasing a car. The leasing contracts can be complicated and can contain a number of items in fine print you should carefully read ensuring you are satisfied. Some leases may have a reduced monthly payment, but contain a number of restrictions during and even after the contract. Other leases may have a higher monthly payment, but include a number of perks during the contract with fewer restrictions at the end of the contract. In any case, unless you have significantly damaged the car, have exceeded the normal wear and tear, or have exceeded the number of miles as indicated in the contract, the leasing company will typically assume the risk due to the depreciation of the vehicle's value. You may be able to negotiate the terms of the contract including the number of miles, maintenance included (for example: oil changes, wheel alignment, or balancing), and the vehicle cost in case you wish to purchase the vehicle at the end of the contract.

        An additional requirement for leasing a car is that the amount of insurance will be higher since the leasing company does not want to loose their investment in the event of an accident.

        If you are close to exceeding (or have exceeded) the mileage indicated in the contract, don't stop driving the car, instead reduce the use of the car. There is no need for you to pay a monthly fee for leasing the car and pay insurance for a car that is not being used. Calculate the cost for exceeding the mileage indicated in the contract, then compare the cost for purchasing the vehicle. You may discover the cost effective alternative is to purchase the car. Although, only purchase the car if it is in good shape and you are satisfied with it's performance.         An additional resource for learning a lot more information about leasing a car can be found at http://www.carbuyingtips.com.


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