Personal Finance: Lease Vs. Buy a Car - as part of the expert series by GeoBeats. A lot of times when it comes time to get a new car people wonder what should I do: should I lease or should I buy that car? And in some respects it is personal, and it depends on how much you can afford, how long you are going to keep the car, how much travel you do. But another important factor is, you know, up front, doing some research, and there are some calculators out on the web site that can help you do a comparison of leasing vs. buying. But a rule of thumb is the payments for the lease are going to be less, but in the end, you do not have any equity in the car. So another way to look at it possibly would be: do I need to have lower payments now and could possibly afford to purchase the car at the end of the lease, and what would that purchase price be? So those are some things to consider when leasing vs. buying. It is always better if you can buy because when you are done with the purchase or have paid off the loan, then you can use the car as long as you want and eliminate some of those payments. The other thing to look at is: how much do you travel? Usually a lot of the leasing companies want you to have less than twelve thousand miles a year. So if you are someone that commutes a long distance, do a lot of traveling, then that may cause you to incur additional fees or force you to purchase the car at the end of the lease. If you are someone that has a business and needs a new car every three years then that also has an influence. However, usually the best thing is to purchase it, and an alternative as far as lease vs. buy would be to get a used car. If you are very good at knowing how to evaluate cars or have someone that is, a used car is more cost effective, because as soon as you drive that car off the car lot, it decreases in value, where a used car has already lost that value.
