re: Car-Leasing basics; what do I need to know?

quote:

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So at the end of the lease you have nothing!, Zero! Nada! Yes you enjoyed driving a new vehicle but you have nothing less your upfront fees and monthly lease payment.

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Have you done the math on this?

Yes, this is technically true, but that lease payment is much, much lower than traditional financing (of the same vehicle). So while you are left with “nothing”, you paid much less over the term to “enjoy driving a new vehicle”.

When you finance a new vehicle, you’re paying the bank a fee to drive that new vehicle. As you continue to drive it, it depreciates in value. So at the end of your term, you’re left with “something” of much lower value.

The question, and the one that determines the value of lease vs buy, is what’s the difference in cost/spend between these two scenarios?

Lease: Fees + Monthly Payment
Buy: Fees + Monthly Payment - Value at End of Term

As mentioned, this always assumes equal vehicles and terms. If you start considering used vehicles, or holding onto them longer, then it’s not necessarily the same scenario and leasing is not really applicable.