Leasing makes sense if:
1. You want another new car in 4 years or less
2. You plan to drive 15,000 or fewer miles per year
3. You have good credit
If you answered "yes" to all three, then leasing can be a smart choice.
Most car shoppers don't really understand how a lease works. Leasing is just another method of financing a vehicle. During a lease, you pay for the use of a vehicle (the depreciation), plus the interest payment - called the money factor.
Some of the advantages to leasing;
1. Lower monthly payments
2. Lower repair costs
3. No hassles selling the vehicle
4. Driving a brand new car every few years.
For your immediate needs, you may want a certain type of vehicle, but know you'll need something different just a few years down the road. For example, if you just got married and are expecting to have kids, you may want to drive something fun for now, but will need a minivan later.
Comparing different lease deals can be confusing. You have all kinds of weird terminology such as cap costs,money factors, and residual values.
Lease payments are made-up of three parts: depreciation, interest, and taxes.
When you lease a car, you're mainly paying for the usage of the vehicle. At the end of the lease, it's worth a lot less than when you first started driving it. You're responsible for paying this depreciation cost. By choosing to lease a car with high resale value, you minimize this depreciation cost.
Leasing involves certain fees that you normally wouldn't have to pay if you were buying a car. A lot of people are confused when they hear "no money down" on a lease, thinking that it literally means you get to drive off with zero initial payment - this is not necessarily true.
The down payment on a lease only makes up one portion of the cash that's due at lease signing. With a lease, you'll also be required to pay an acquisition fee, plus a disposition fee at the end of the lease.
Don't forget you'll also have to pay fees such as dealer doc fee, tag, title, registration and license fees just as if you were purchasing the vehicle.