Posted on: 30-10-04 09:22:55
Need to know pros and cons of leasing vs. buying. I am currently leaning towards leasing. Need your feeback and reasons.
Thanks,
Cherryl
Major problem with Leasing is that, You have to keep the car usage to about 10,000 km / year. If you exceed that they will ask you to pay extra. For my usage I would easily go about 20 K in a year.. so i decided to buy.
If your usage is going to be below 10K for a year then leasing would be a good idea as you can get a good and new car at a reasonable monthly payment.
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Your attitude, not your aptitude, will determine your altitude.
Rule of thumb, purely from tax consideration, is:
If you are employed, go for loan.
If you are self-employed, go for lease.
This is based on how these two categories are taxed.
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Man's Best Friend 
Somehow leasing a car never made sense to me for personal use.
Some pros and cons as I see it : old timers with more experience may correct me
If you have a business you can claim taxbenefits for your lease and insurance and so it makes great sense. You can also drive highly fancy cars for $350 lease month.
The problem i see with leasing is that at the end of lease period you own nothing . You might as well pay the same monthly amount towards a car loan and eventually own the car in 3-5 years. In leasing you pay for 3-5 years but in the end you own nothing, leasing is like renting the car for long term, with milage restrictions and you have added liability to keep the car in good shape.
thats how i see it ....what you others have to say .
Mishtar
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What can be imagined, can be achieved.
Quote:
Orginally posted by dfwrp
Major problem with Leasing is that, You have to keep the car usage to about 10,000 km / year. If you exceed that they will ask you to pay extra. For my usage I would easily go about 20 K in a year.. so i decided to buy.
If your usage is going to be below 10K for a year then leasing would be a good idea as you can get a good and new car at a reasonable monthly payment.
My case it will easily go over 40K/y
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Special Requests: Please call me after 5:30 because I am self-employed and my employer does not know I am looking for another job
If you like to drive around a new model car every 4 years or so then leasing is the way to go - because, you can walk away from the option of buying the car at the end of lease period.
Plus, the other advantage of leasing is that you pay the GST + PST = 15% (applies for Ontario only) on lease payments each month as opposed to paying it upfront when you buy the car.
Purely from a cash flow perspective leasing makes more sense because your monthly payments are lesser compared to owning a new car financed by a loan. And, also your cash flow payments are predictable. Further, the first 5 years you're covered by a manufacturers warranty (assuming you're buying a new car) and therefore the repairs and maintenance costs (excluding oil change, etc.,) are negligible.
The only flip side to leasing a car is that you don't become owner of the car until you opt buy out the lease - either at the end of the lease or earlier if you choose to do so.
It's a tough choice but I rather like the lease better because you have a new car every 4/5 years. But, you should also be aware that there are hefty early termination penalties associated with most leases.
Daks
