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Pros;
- Cheaper payments compared to financing
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Not always. Some vehicles do not lease out well due to rates & residuals.
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Cons;
- Some buyouts are higher compared to the actual market value of the car when your lease is up
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If the market value after the lease is higher than $24,000, let's say $30,000, you can buy it out for $24,000 and flip it for more. If the market value after 3 years is lower than the buyout price, give it back to the dealer and let them take the hit.
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Having equity in a lease is a BAD thing. I'm absolutely amazed at how the import manufacturers have been able to sucker people into thinking that it's a GOOD thing to have to buy out your lease and sell it to get your money back. Think about it.. all that means is that you've paid too much every month on your lease payment. Leasing is a better deal if the manufacters take a hit on the lease end value instead, which means your monthly payment is lower, and you don't have to try to get your money back at the end of the lease.
Some people think that leasing is like renting and that it's always better to buy. Well yeah, it is like renting, except you're not renting a HOUSE that increases in value, you're renting a CAR that is constantly DECREASING in value. A lot of old people can't seem to wrap their stupid traditional heads around this concept. (These are usually the same people who think their old junker trade is worth stupid money)
Now, some people don't like the COMMITMENT that leasing demands - and that's a very valid point, especially if you might be moving around or needing to change vehicles before your lease is up. It's better to finance in that case.
Basically if you change vehicles every 2-3-4 years, leasing is great. If you tend to keep your cars for 10+ years, and/or tend to modify them, go with a purchase instead.
If you do go into a dealership thinking about leasing, don't expect to get a really nice car for ~$300 a month. It's basic math - $300 x 36 = $10,800. That's about what a $16,000 MSRP car leases out to, depending on rates & residuals. Also, calculated residuals drop every quarter. So, if you're leasing, you want to get the current model year, as soon as possible, unless the lease rates are still really high.