Leasing is a good idea for someone who has plenty of cash flow and changes their mind a lot. If you have the cash flow to cover the payments then you just lease the car for a couple of years and turn it back in and get another one. It can work out okay if you really like the car and you don't get upside down on the buyout. There are of course some ways it can go really wrong.
Leasing also works for people who want to drive a nice car but are too poor to afford what they want to drive. They pay more in the long run but sometimes people can afford a monthly payment even though they can't afford to buy the car. You don't really want to be in that situation but sometimes people end up there. Leasing works pretty well for some business situations where you don't want to own the equipment, you just want to rent it or lease it. That doesn't sound like your situation unless you happen to own your own small business.
Not sure i agree with much of what was said above.
Leasing allows a person to drive a car under warranty that makes your monthly outlay known. Regards cashflow, most everyone who has a new car makes payments on it.
With low finance rates and money factors( lease rates) it can, in many cases, be foolish to pay cash. Rates are lower than what an intelligent money manager can make on the money elsewhere.
The average person in the US who BUYS a new car, has it for 40 months. So, they never own it either before trading or selling it. The vast majority of loans are longer than 40 months. Many are 72/ 84 months. So a person can have negative equity( owe more than its worth) in many cases. Such is not the case with a lease.
When leasing, one should be accurate about how many miles you intend to drive, and if necessary, have extra miles factored into the equation, up front.
Regards the comments above about those that lease being poor, couldn't be more wrong. Leasees typically are more intelligent than many others, have eXcellent credit, are responsible, and know what they want, have done due diligence investigating what might be best for them.
People that drive new Mercedes, Lexus, etc, by far and away lease them, not buy them. Not the poor person mentioned.
There can also be sales tax advantages in leasing. Here in Michigan, sales tax is 6%. You buy a new 30k car, you pay 1800 in sales tax. No matter how long you own( pay on) that vehicle, you are out that 1800 bucks. On a lease, you pay 6% sales tax on the payment. Example, you lease that 30k car for a 30 month lease. Payment is 300 per month.
You pay( including tax) 318 per month, so 6% of 300=18. So what is 18 bucks times 30. Its 540 dollars. So its almost 1300 cheaper than the tax on the buy was... that is a LOT.
Regards buying out your lease at lease end.... generally, if the lease payment was attractive, the buyout wont be. Seldom is it a good deal to buy it out. If the lease wasnt incentivized Looking at buyout figures might be worth looking at.
