Basically, the reason your payments are so low on a lease is because you're not paying for the actual price of the car, you are instead paying for the expected depreiciation during the time you are using the car.

By paying only the depreciation, the amount your payments are based on is generally far less than an outright purchase, since in a purchase you are paying for the full cost of the car. When your lease is over, you will have two options: return the car to the dealer, or buy the car.

If you return the car, you may have fees/charges to pay. Leases generally restrict you to a certain amount of miles, most often 12,000 - 15,000. If you've driven over that amount of total miles (allowed mileage per year x years of ownership) there is generally a "per mile" charge. It's usually only $.10 or $.15, but it's per mile OVER your allowed mileage, which, if you're way over could quickly add up.

If you buy the car, you will have to pay the "residual" amount, or, the difference between the amount you've already paid on the depreciation and the original cost of the car. So, if you lease the car for 3 years, then decide to buy out the car at the end of the lease, you could end up financing that for five, and be paying on a car for 8 years That's a long *** time to be paying for a car.

Also, with leases, you are generally obligated to have your car serviced only at the dealer, you have to perform ALL recommended maintenances on time per the manufacturer schedule, you probably shouldn't modify the car (I'm sure the lease agreement will say you can't modify it), etc. I took higher payments to buy my car outright. I don't want to lease.

 

why do you want to lease versus purchase?



aloha
greg

 

why not buy the car, then sell it when you get out of school? You'll end up losing less money that way. If you can't afford the payments on a purchase, just look at another car. I know it's hard to do, but you'll be much happier down the road when you can actually afford to buy the car you want and not just rent it.

 

Technically, if he gets rid of the car RIGHT after he gets out of college, he'll have spent less money, provided that he stayed within the agreed upon terms of the lease. If he went out of those terms, like over miles, body damage, etc, he could end up paying more.

If you want to mod your car, drive it more than 12,000 or 15,000 miles a year and basically not have to worry about bs rules with YOUR car, you'd probably be better off buying it. I mean, you may not be in a position right after college to afford a new car, or to finance the residual on this one. If you take 5 years to get through school with a 5 year note, when you graduate, you're out free and clear with no car payment and you're stylin. At that time you've also got an asset (albeit a depreciating one) that you can use to help you buy a new car, buy a house, or nothing, if that's what you choose.

If you lease the car for five years, you're basically dooming yourself to a car payment as soon as you graduate since you'll either have to finance/pay for the residual or get a new car when your lease ends.

Good luck with whatever you decide

 

good call. plus, you wont want to give your back after 2-3 years... these cars are a blast to drive

 

heard that. I'm coming up on a year and a half and can't think of a reason to get rid of mine...well, except for if I got an STi, but that'd be it