Vehicle Lease or Buy Calculator

Consumer behavior pushes funding trends along, creating financing options to cover people's needs.  Homes, cars, and other purchases rely on creative financing approaches, in order to furnish daily necessities, and allow purchases beyond the scope of cash on hand.

Cars and trucks follow closely behind homes as our biggest expenditures, calling-for loans stretching-out over several years of repayment.  On the other hand, those satisfied driving older cars choose instead to buy what they can afford, paying cash for the entire purchase prices of vehicles they buy.  The best approach is an individual concern, depending on lifestyles and precise vehicle needs.

In addition to outright purchases and longer-term financing, there is another option available to individuals needing cars.  Leasing, rather than buying, provides a viable alternative for staying on the road, especially under certain circumstances.  Automobile leases operate in much the same way property contracts do, with particular responsibilities required from lessees.

How Leases Work

Conventional purchases are either paid-in-full at the point of sale, or credit is used, allowing buyers to pay for big-ticket purchases over time.  In either case, the items purchased do not actually belong to the buyers until all the creditors are paid off.  Mortgages, for example, extend low-interest financing for decades, but property rights remain with the lenders until borrowers satisfy their repayment agreements.  The principle guides purchases to reduce risk for lenders, by backing-up loans with actual property.

Leases are similar, in that they formalize agreements between buyers and sellers, but leases do not lead to changes in ownership.  In other words, lessees simply use homes, cars and other items, paying for the right to do so.  Unlike the things you buy though, items you lease do not belong to you at the end of your contract.

The most common examples of leasing seen in every day life are housing agreements and residential rental contracts. Apartments, condos, and other rental properties are used for pre-designated periods, under agreed upon terms, before being surrendered back to their owners, in like condition.  Leases also play important roles in business and industry, allowing companies to use machinery, equipment, and other expensive capital items without actually buying them.

Leases have also grown in popularity on the automotive market, furnishing another alternative for vehicle shoppers.  Whether or not to lease instead of buying your next vehicle depends on a number of personal conditions and preferences.

When to Lease

There are a number of things to consider when moving forward securing new vehicles.  Your own personal preferences play heavy roles, as well as practical concerns which lend themselves to one approach, or the other.

Businesses typically lease vehicles instead of buying them, because the expenses associated with their cars and trucks are deductions, which impact the bottom line differently than personal leases do.  The number of miles you drive also factors in, because leases carry mileage limitations, which become costly when exceeded.  If your use includes lots of miles and rough impacts on your car, leasing may not be your best approach, because you'll be held accountable for excessive miles and other damage at the end of your contract.

Vehicle lease or buy calculator helps dial-in the financial considerations associated with each option, providing insight into your best approach.