Lease versus buy?
The answer is - it depends. It's not possible to simply say that one is always better than the other because the answer depends on the specifics of each individual situation. Leases and retail loans are simply two different methods of automotive financing. One finances the use of a vehicle; the other finances the purchase of a vehicle. Each has its own benefits and drawbacks. When making a 'lease or buy' decision you must look not only at financial comparisons but also at your own personal priorities - what's important to you. Is having a new vehicle every two or three years with no major repair risks more important than long-term cost? Or are long term cost savings more important than lower payments? Is having some ownership in your vehicle more important than low up-front costs and no down payment? Is it important to you to pay off your vehicle and be debt-free for a while, even if it means higher monthly payments for the first few years?
Buying and leasing are different. When you buy, you pay for the entire cost of a vehicle, regardless of how many miles you drive it. You typically make a down payment, pay sales taxes in cash or roll them into your loan, and pay an interest rate determined by your loan company, based on your credit history. You make your first payment a month after you sign your contract. Later, you may decide to sell or trade the vehicle for its depreciated resale value. When you lease, you pay for only a portion of a vehicle's cost, which is the part that you "use up" during the time you're driving it. You have the option of not making a down payment, you pay sales tax only on your monthly payments (in most states), and you pay a financial rate, called money factor, that is similar to the interest on a loan. You may also be required to pay fees and possibly a security deposit that you don't pay when you buy. You make your first payment at the time you sign your contract - for the month ahead. At lease-end, you may either return the vehicle, or purchase it for its depreciated resale value.
Lease or buy? It depends on what's most important to you. All of us have different lifestyles and priorities - in cars and in finances. Car lease-versus-buy decisions must be made with your own lifestyle and priority attributes in mind. What's right for one person can be totally wrong for another.
Lease - If you enjoy driving a new car every two or three years, want lower monthly payments, like having a car that has the latest safety features and is always under warranty, don't like trading and selling used cars, don't care about building ownership equity, have a stable predictable lifestyle, drive an average number of miles, properly maintain your cars, are willing to pay more over the long haul to get these benefits, and understand how leasing works, then you should lease.
BUY - If you don't mind higher monthly payments, prefer to build up trade-in or resale value (equity), like the idea of having ownership, like paying off your loan to be payment-free for a while, don't mind the unexpected cost of repairs after warranty has expired, drive more than average miles, prefer to drive your cars for years to spread out the cost, like to customize your cars, expect lifestyle changes in the near future, and don't like the risk of possible lease-end charges - then you should buy.
SignatureLEASE® from Nissan: Nissan's Signature Lease offers more choices than your average lease program. Terms range from 24-60 months, with 12-month terms available upon request. Remember, by leasing a vehicle, you can usually get a bigger, better-equipped car than you could afford to purchase, enjoy a new car every few years, pay only for the portion of the car's life that you use (which means a lower monthly payment), receive tax benefits if used for business (depending on the lease, state, and tax laws), invest any savings in appreciating assets (such as stocks, bonds, etc.), spread applicable sales tax across monthly payments (varies by state), enjoy end-of-lease options: you can buy the car, lease another vehicle, or explore other choices.
Purchase or Lease? Which one is Right for You?
Purchasing - Benefits
- Build Equity
- Drive as many miles as you want
- No wear and tear charges
- Carry lower limits for auto insurance than with a lease (See your insurer for actual quotes)
- Customize your vehicle (though this may invalidate portions of your warranty)
- Sell, trade or transfer title whenever you want
Leasing - Benefits
- Get a bigger, better equipped car than you can afford with a purchase
- Enjoy a new car every few years
- Pay for only the portion of the car's life that you use (which means lower payments)
- Receive tax benefits if used for business (depending on the lease, state and taxes)
- Spread applicable sales tax across monthly payments (varies by state)
- Enjoy end of lease option: you can buy the car, lease another vehicle or explore other choices