To Lease or Own...That is the Question

[Seniorgirl411]

For all those agents out there: I have to get a SUV and wondering with all the miles I drive, is it better to buy a car or lease? I heard I can take the lease payments off of my taxes. What do you guys do? What if you go over the mileage? Let me know what you think!

 

[VaDwayne]

For all those agents out there: I have to get a SUV and wondering with all the miles I drive, is it better to buy a car or lease? I heard I can take the lease payments off of my taxes. What do you guys do? What if you go over the mileage? Let me know what you think!

With a lease you can write off 100% of your payment if it is a business vehicle, because each payment you are paying for the depreciation of the vehicle. If you lease, put as little a down payment as you can. Your residual value will not change regardless of your down payment, and you want to beable to write off the higher payment. Keep this in mind; If people would have leased their vehicles before the market tanked, they could have walked away at lease end and let the lease company eat to negative equity instead of them having to do it, or getting repo'ed, or adding the negative equity onto the price of a cheaper vehicle with smaller payments so they could lower their payment. I know people who lost 15,000 or more when gas prices shot up to 4 bucks.

If you buy an SUV, and gas prices go back up to 4.00 a gallon, you will be thankful you leased it, regardless of the tax deduction difference.


If you take the mileage, it is 55 1/2 cents per mile. In my case it was much more beneficial to take the mileage deduction because of my low payment. I don't lease because I am a licensed dealer and went to the auction to buy my car.

Please keep in mind, whatever you choose, you must stick with and can't change.

I was in the car business for 20 years, 7 of that was in finance. If you have any questions, give me a call at 540-241-1702.

 

[YouGotMyMoney]

There's always LeaseTrader.com

 

[CHUMPS FROM OXFORD]

Just curious...Wouldn't it be better to finance a vehicle over seven years than take out a three-year lease?

I have only leased once. However, I read a magazine article on leasing about 10 years ago.

 

[Newby]

Personally I would buy a used car and save 65% and pay it off as quick as you can have a couple of good months. Then drive it for 3 years and do it again.

 

[VaDwayne]

Just curious...Wouldn't it be better to finance a vehicle over seven years than take out a three-year lease?

I have only leased once. However, I read a magazine article on leasing about 10 years ago.

NO WAY! An 84 month loan will only keep you uspside down in your vehicle for 7 years. You will never have equity in the vehicle. If you do a 7 year loan, you will pay a high interest rate too. Because of the long term, very little of your payments will go toward the principle.

I am not a leasing fan. I think you should buy a used car and finance it no more than 48 month. If you have to do more, you can't afford that particular vehicle. However, there are times when leasing makes sense and that is for business purposes and for vehicles that may depreciate quickly due to cicunstances beyond your control(high gas prices) Most people lease because they are buying more car than they can afford and will do whatever it takes to get the payment affordable, regardless of the final price. This is not the reason to lease. Why buy used, here is an example. The 2007 Ford Taurus that I drive was around 25000.00 new. I bought it in Jan 2009 with 38000 miles on it for 8230.00. If I had be careful what youbought it new, that means I would have lost 17,000 to drive a car 1 year.

If I ever buy a new car, which is doubtful, I will lease it.

Be careful what you buy:

2008 Ford Expedition 52000.00
rebates 10000.00

sale price 42000.00
1st year depreciation 12000.00

in 1 year it is worth 30000.00 you just lost 12,000.00 dollars
with the gas crisis 15000.00 you just lost 27000.00 in 1 year

if you financed it for 7 years you would still owe 40000.00 for a veicle that is worth 15000.00

now if you would have leased it, you could have walked away at the end of the lease knowing exactly what you would be getting for it. The only money you would have lost was 3 years of payments. GM would have had to eat the remainder.

 

[Crabcake Johnny]

Dunno. I bought my Pontiac in 2000 on a 5 year loan - it's paid off and runs. Not having a payment means hundreds a month in savings.

I don't care what you're saving by leasing, when all the dust settles, at the end of the lease period you're going to continue having payments - even if you turn it in you'll need another car.

 

[CHUMPS FROM OXFORD]

That was my point. I love that last car payment.

 

[Ron Van D]

Just curious...Wouldn't it be better to finance a vehicle over seven years than take out a three-year lease?

I have only leased once. However, I read a magazine article on leasing about 10 years ago.

I have only leased one time. It was a 4 year 100,000 mile lease. I put 184,000 miles on the car and decided leasing wasn't for me.

PS: I stayed at a Holiday Inn Express shortly thereafter.

PSS: I always take the mileage since, as Newby said, I buy used and let someone else take that big hit on the depreciation.

 

[annuityseller]

I got an even better answer,pay cash!!! I haven't had a car payment in 12 years and saved a bunch of interest!! and I still get all the tax deductions (milage) when I have to buy a car I purchase what I can pay for period, I don't drive a lexus or MB but I alway buy american, just my point of view