differences in buying and leasing :: essays research papers

  Ã‚  Ã‚  Ã‚  Ã‚  Buying and leasing are two very different approaches to obtaining a vehicle while both have their advantages and disadvantages both can also benefit the purchaser. There are many differences between the two but the primary difference is with buying money is paid to own the vehicle and with leasing money is paid to use the vehicle. According to the site www.towtrucknet.com/financing.htm, of the 15.5 million new vehicles sold in 1998 a record 5.3 million were leased. The three main differences are payments/price,  Ã‚  Ã‚  Ã‚  Ã‚   depreciation value, and valuable differences.   Ã‚  Ã‚  Ã‚  Ã‚  Monthly payments and the money put down play a big roll in obtaining a vehicle. Buying requires a down payment in the form of trade or cash whereas leasing requires little or no down payment. Monthly payments are based on the purchase price of the vehicle if bought, but if leased payments are based on the use of the vehicle. Although if leasing, the payment terms are incredibly shorter.   Ã‚  Ã‚  Ã‚  Ã‚  Vehicle depreciation also varies with a purchase or a lease. If someone is buying, the tax deduction will equal the full depreciation of assets per the I.R.S. schedule. If leasing it is optional to buy out the lease at the end of the term, rather than go by the I.R.S. schedule. With buying, the finance period can extend beyond the warranty period, unless warranty options are added. In contrast, with leasing, the warranty will last for the full term of the finance period no matter what.   Ã‚  Ã‚  Ã‚  Ã‚  The valuable differences in the two make the decision a lot easier. Like stated earlier the main difference is with buying, money is paid to â€Å"own† the vehicle with leasing money is paid to â€Å"use† the vehicle. If buying insurance companies are very flexible however if leasing insurance companies are more complex. More miles can be put on a car if it is bought, like as many as 500,000 if the owner wishes. Conversely, only 12,000 miles a year are available on the average with a lease program. Not only can newer vehicles be bought more often with leasing, but also more and better vehicles for the price. Large amounts of money are paid out to own the vehicle, whereas with leasing the payments are smaller.