The following information regarding car leasing is published on the Indiana Department of Financial Institutions Web Page. I think that “car ownership” is way overrated as you never own the car until the last payment is made anyway. Car ownership is very similar to “home ownership” in that both will be taken away from you if you do not continue to make your monthly payments.
So criticizing the information on the State of Indiana financial web page does not require much of an argument to be convincing since you do not own the car anyway. We just leased a $25000 Toyota Camry for $2300 down and ONLY $200 dollar a month payments. Had we paid $5000 down to purchase the vehicle, our monthly payments would have been $400 per month to pay for a car that would not be ours for 5 years. So we would have been paying twice as much down and twice as much on our monthly payments to “own” the Camry. Looking at it like this makes leasing the obvious choice over purchasing.
We also have the option to purchase the vehicle 30 months into the lease. The Camry is under warranty for the duration of the 36 month lease with free oil changes. Also there is no haggling over trade-in value when you are leasing! THINK TWICE BEFORE YOU BUY A BRAND NEW CAR. We all know that a car depreciates close to 25% when you drive it off the dealer’ lot.
Automobile leasing is not a simple matter. Cars lose value or depreciate over time. When you lease a car for two years, you are paying for two years of depreciation in monthly payments plus interest. At the end of the lease, the automobile can be either sold to you or someone else for its value at that point. When you lease, you pay to drive someone else’s vehicle. There is no ownership or equity, you simply pay for the use of the automobile. The manufacturer’s warranty covers most repairs but all maintenance costs and insurance are your responsibility.