If you "need" a new car every three years, a lease might be best for you. It's simple, with minimal unknown costs. If you plan to keep a car for a long time, buying will likely save you money.
Pros for Leasing a Car
Lower monthly payments:
When you lease, you aren't paying for the whole car. Instead, you're paying for the difference in the car's value now versus its value at the end of the lease.
No repair costs:
Since your car is new, it will be under warranty over the life of the lease. If you own it, your warranty will end.
You always have a new hip car that everyone envies.
Cons for Leasing a Car
Higher insurance premiums:
Since you don't own the car, the leasing company gets to call the shots when it comes to insurance. They usually require more than minimum state standards.
A lease charges you extra fees for driving too many miles. When you own, you can drive as much as you want.
Payments never end:
If you keep leasing cars, your payments never end. When you buy a car, you'll eventually pay it off.
You always have a hip new car that everyone wants to steal.
Fancy Car Leasing Terms
The amount you can buy your car for at the end of the lease. This is usually preceded by "You want me to pay HOW much?"
The negotiated price of the car including all of the options (air conditioning, DVD player, and cotton candy machine).
Money factor (or lease factor):
The interest rate you're being charged in your lease (not to be confused with money factory, a place in your dreams that doesn't really exist).
"Can't go lower":
Lies. All lies.
The amount of money you have to pay to own the car at the end of your lease. (In other words, the money you don't have.)
Bert was an eager new salesman at a car dealership who wanted to make a splash on his first day. So when a young woman came in, he rushed up to her and introduced himself. "Hi, how are you? I'm Bert."
"Lisa Carr," she replied, shaking his hand.
"Well, our lease plans are quite affordable," Bert offered.
"Oh, I don't want to lease. I want to buy a car."
Bert looked puzzled. "But you said lease."
"Nooo, I want to buuuy."
"Um, okay. Can you tell me your name again?"