Lease vs Buy

BUYING     vs      LEASING Ownership     It's Yours   Use It, Then Return It Upon signing the contract, you are the owner of the vehicle, which means you now have some obligations you need to fulfill.  For instance, if you do not meet your promises in the contract, whomever you are financing with has a number of rights they can pursue.  This even includes the right to take your vehicle.   You do not own the car when you lease.  Your lessor owns the vehicle.  What you're paying for is the use of the vehicle; this includes base rent, taxes, title, registration fees, etc.  During or at the end of your lease term, you are able to purchase the vehicle.          Up-front Costs      Down Payment   Acquistion Costs and Capitalized Cost Reduction To qualify for  credit in general or for a monthly payment you would like, you may need to make a down payment.  In addition, you might also have to pay other amounts, including, but not limited to, applicable fees and taxes associated with the purchase and delivery of your vehicle such as: license fees, registration fees, administrative fees, title fee, etc.  Depending on your financial situation, you may be able to finance some or all of these fees and taxes through your installment sales contract.   Your capitalized cost reduction (CCR) is similar to a down payment.  While making a CCR might reduce your monthly payment, it is not always necessary to qualify for credit or the monthly payment you would like.  When you sign your lease, you can expect to pay for the first monthly payment, the security deposit, the acquistion fee, and other fees and taxes.  Depending on your financial situation you may be able to finance some of your up-front costs through your lease contract.         Monthly Payments      Payments Lower the Amount Owed    Payments Are For Use Of the Vehicle The dealership will use the amount you've financed and your Annual Prcentage Rate to calculate your monthly payments.  Keep in mind that your amount financed does not typically include any payments (such as a down payment) that you may have already made when you signed your contract.    The lessor is the owner of the car.  This is why you're typically able to pay less per month in a lease than you would if you were to buy a vehicle.  Your monthly payment goes to cover the depreciation of the vehicle as well as other applicable fees and other amounts you have through your lease (like taxes, title, and registration, etc.)        Going Above and Beyond      Pre-Payment    Early Termination When you finance the purchase of your new vehicle, it may be possible for you to make additional payments (or even pay off the entire amount in full) aheat of schedule.  This is known as "pre-payment".    There are various ways you can fulfill your promises on your lease.  However, early termination charges may be assessed if your lease is terminated before the contract ends.           Vehicle Return      You Decide    It Depends You can modify it, sell it, pass it on to someone ... it's up to you!  You do not return the vehicle at the end of the term.  During the term, if you cannot make your payments, you may have to return the vehicle to your finance source or your finance source can take the vehicle (repossess) from you.   If you're not sure whether or not you'll want to return the vehicle when your lease is up, ask about the various lease options that are available to you.          Future Value      Your Risk    Lessor's Risk Protect your investment!  The future value of your car will depend in large part on how well you maintain it.     In a closed-end lease, the lessor assumes most of the risk, but you will have to pay for excess mileage and wear when you return the vehicle.  Be mindful of your lease terms (such as your mileage limits) and try to adhere to them.  If you don't, you will be assessed charges when you turn in your vehicle.        Mileage      Unlimited    Limited It's simple: the higher the mileage on your vehicle, the lower the resale value will be.    The miles you may drive without paying excess mileage fees are pre-set in your contract.         End of Term      No More Payments    See Your Contract Once you're paid off what you owe in yoru contract, there are no mone payments to make.   At this point, whether you buy your vehicle depends on what you choose.  Purchase options are state in your lease agreement.