To Lease or Not to Lease

l. Introduction

Question: Does Leasia9 Make Sense for You?

The answer: Unfortunately, it's an inconclusive "it depends."
The only way for you to answer the question satisfactorily is to understand how a lease works, how the payments are determined, and how to estimate your total out-of-pocket costs over the term of the lease.

A note: If, as you read this section, you get the impression that Automotive Consumer Information Service, Inc. is anti-lease, that is not the case. What we are is for knowing the facts. Unfortunately, in today's market many of the advertised leases are simply "come-ons" designed to get you into the dealership. Once in the "dealer's lair," you may find there are more out-of-pocket costs than the advertisement would have you believe. You may even find that the vehicle in the ad isn't available.

Having made that point, understand that leasing can be financially very beneficial in many situations. For example: A recent ad from Ford Motor Company offered a three-year lease on a $12,345 car for just $1,000 down and $169 per month. To buy that same car with $1,000 down and a three-year loan at 8 percent would cost just over $320 per month. Even were you to extend the loan to five years, the payment would be about $35 more per month than the lease. The only difference, of course, is at the end of the lease, you don't own the car.

Leasing Is Growing
Currently, over 1.7 million people are opting to lease vs. buy. And with. the growing popularity of used-car leasing, the number should grow substantially. The keys to smart leasing-the decision to lease and the structure of the lease deal-are not much different from a purchase situation. The informed auto lessee makes it a point to know as much. about leasing as possible and then to make decisions with the benefit of that knowledge and information.