understanding how leasing works
about auto leasing
Leasing is a Rental Agreement
Leasing is simply a 3-yr or more rental agreement. You are renting the car for a period of time that you will return at the end of your leasing agreement.
The advantage of leasing is that the monthly payments are significantly lower than financing. The disadvantage of leasing is that you will not be building any equity value. You don't own anything.
The financial advantages and disadvantages of leasing will vary by person and circumstances.
- If you are a person who must drive a new car every 1-3 years, then leasing may be your best financial option.
- If you are a person who likes to replace your car every 5 years, then either leasing or financing will be your best financial option.
- If you a person who likes to drive the same car for 7 or more years, then financing would be your best option.
Some helpful tools for making decisions: