I've been looking after a dealership website for some time, and throughout the course of that time I've leased a Toyota. Recently I got thinking; was it better to lease a brand new vehicle, or should i have bought a used car? Lets do a comparison of buying vs leasing in terms of costs.

I received my car in the summer of 2007 (exactly at the top of the economy - terrible timing for large acquisitions) and picked intelligently, a Toyota Corolla (recalls notwithstanding). I have maintained it in fine running order by obtaining frequent maintenance and changing everything that has called for it. Hence there have been zero major bills. It costs me $320 each month for that car, which means that during the 48 month lease span I'll have handed over $15,360. For upkeep expenses, I would peg it at about $1,600 over the years for all the oil changes, tires, etc...Thus giving a a final price of about $17,000 I'll have spent when it is going back. In case I would like to obtain it I need to fork out another $10,000. That's $27,000 for that $17,000 car.

Let's suppose I'd chosen to purchase a used auto? For this example I opted for a car that cost $5000 Just like any type of financial loan, I'd prefer to pay it off as fast as possible to minimize the dollar amount of interest fees paid. Even in the event my credit standing was dreadful (meaning a 25% interest rate) I'd only pay $267.04 every month without having any money put down during a 24 month loan term - $6408.96 in total. Of course I am not going to expect that it was a fantastic car, so we can also anticipate that it really needed $3,000 to fix parts that broke during the period of the term. Keeping the service costs similar that takes us towards a maximum of about $10908.96 throughout the 2 years (6408.96 1500 3000). As you have seen, in spite of a substantial rate I'd still save $6091.04.

Now consider what the difference would be using a lesser interest rate, a deposit, or if the vehicle was a real find and auto repairs weren't necessary. Then take into consideration if you would have picked up a personal loan through the bank and spent much less for the car initially. The price savings genuinely begin to add together.

And forget about the sum of total money used up, at the conclusion of the loan term, I would have something I could sell, whereas now I've got to pay a further $10,000. And if that $10,000 is loaned, much more than that. It pains me merely to think about it.

A lot of people may well assert that a brand new automobile has much more cachet, and to an extent that could possibly be a fact. In this instance, I don't assume so. A 2008 Corolla is comparable to a used car, with regard to cachet. Believe it or not, I might even credit that to the used car.

After all the calculations, obtaining a quality used car is always a superior option than leasing. I've truly come to understand my lesson, and will probably be getting a used car when my lease up. Don't repeat my error.