PURCHASE or LEASE???

Below is a description and comparisons of Leasing vs. purchasing. Each choice has its own advantages and disadvantages and making this decision depends on several factors, including your personal preferences and finances.

   OWNERSHIP

· Leasing: You don’t own the vehicle; you must return it at the end of the lease unless you choose to buy it.

· Buying: You own the vehicle once you make the last payment. Up-Front Costs

· Leasing: There may be up-front costs such as first month’s payment, refundable security deposit, capitalized cost reduction, taxes, registration or other fees.

· Buying: Some of the up-front costs could include the down payment, taxes, registration and other fees.

PAYMENT

· Leasing: Monthly payments can be lower (or they could be the same with a shorter term) since you pay only for the vehicle’s depreciation.

· Buying: Monthly payments can be higher (or for a longer term) because you are paying for the entire purchase price of the vehicle.

EARLY TERMINATION

· Leasing: If you end the lease early you are responsible for the lease pay-off, plus any early termination charges.

· Buying: If you end the loan early you are responsible for the loan pay-off amount.

   RETURNING THE VEHICLE

· Leasing: When the lease is up you return the vehicle to the lender and pay any end-of-lease costs, then walk away.

· Buying: Not required, but when you want a new vehicle you may have to sell or trade the vehicle.

 FUTURE VALUE

· Leasing: The future value of the vehicle is predetermined by the lessor and the leasing organization assumes all the
risk for the vehicles value, not you.

· Buying: You assume all the risk of the vehicle’s future market value.

MILEAGE

· Leasing: All leases have mileage limitations that you negotiate up front. If you exceed these limitations you will be assessed a mileage penalty at the termination of the lease.

· Buying: There are never limits to the miles driven on the vehicle, but the more miles you drive the lower the vehicle’s trade-in or resale value will be.

 END OF TERM

· Leasing: The current lease has ended and you must decide to purchase the leased vehicle outright or lease another vehicle.

· Buying: You made your last payment and you now own your vehicle.

ADDITIONAL INFORMATION

· Leasing: There can be a few more advantages of leasing; leasing  is beneficial for people who want new vehicles every
2 or 3 years.

· Leasing: This may be a better choice if the vehicle is being used for  business, you can usually deduct the lease payments as an expense rather  than deducting the depreciation which can be less.

·  Buying: Although it may require higher monthly payments or longer financing terms, there are no restrictions for mileage,
 how or where you can use the vehicle and the money is going towards something you will eventually own.