Should I Buy A Leased Car?
Buy A Leased Car: Introduction
One of the primary advantages of leasing a car is the to leverage your dollars. With a lease you can drive more car than you afford to buy because you’ll only pay for as much of the car as you use during the lease term. In other words, you pay only the amount the car is expected to depreciate while you while you have it.
Let’s say you lease a $50,000 car over a period of three years. It is estimated the car will depreciate a total of $10,000 a year if the car is driven a certain number of miles and maintained in a certain condition. Your lease payments are then based on the amount of depreciation the car will incur during the period of the lease.
That said, the total of your lease payments would be $30,000. So for a total of $30,000 you’ll get to drive a $50,000 car for three years. Leases typically give the lessee (that’s you) the option to purchase the vehicle at the end of the lease.
Whether or not this is a good idea depends upon a number of factors.