Which variables, both on the buyer and sellers’ side, are most critical when deciding between a vehicle lease, or purchase?

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Which variables, both on the buyer and sellers’ side, are most critical when deciding between a vehicle lease, or purchase?

In: Economics

… I realize this is not a black and white answer, but more interested in a scenario where leasing would be/would have been a more financially sound decision by 1. Saving money, and/or
2. Lower payments.

How far into the future would one consider for a **lease** (such as desire/ability to continue monthly payments without debt)
vs.
A **new purchase** (length of ownership, expected depreciation, ownership when note is paid, tax (dis)advantages, etc.)

You are correct that is isn’t black and white but more than just the cost of the lease itself. If you lease a vehicle you have something very important – liquid capital.

If you are a business you can use that money to invest in your company. If you are an individual you can invest the money, put it in savings, pay off other debts or just buy something that makes you happy, which has intangible value.

As consumers we tend to not to see money in the bank today as more valuable than money we will have to pay back in the future. Which of course it is if you can make a return on that money.

100% the only answer to this is whether you want to deal with the hassle of selling the car at the end of 3 years.

If you have a $30,000 car and it’s expected to be worth $20,000 in 3 years, your lease payments will add up to $10,000 (plus a little extra due to the fact that you’re effectively borrowing $30,000 so you’re paying some interest). If the car company gave you a lease for only $9,000 and the car lost $10,000 in that time, they would lose money.