What is a lease?
Permitted use of a product for a fixed period of time, usually for some type of payment, without any form of ownership included. A simpler definition: "A non-equity purchase!"

Now a purchase?
Exchange of money (and/or credit agreement) for a commodity.(Sales tax, property tax, licenses, maintenance, and possible finance charges will increase the TOTAL purchase cost.)

Which is better?
The answer depends on many factors -- and here are a few to consider.

Leasing currently accounts for about 30% of the vehicle market, and the total has been rising steadily over the last 40 years. To determine which MAY be better, lets examine recent nationwide polls of consumers who have selected one over the other and the top five reasons for their selection:

Why I purchased and didn't lease:
Paid cash so had no other costs.
Wanted to keep the vehicle a long time.
Wanted to own/not sure about lease.
Credit not strong enough to lease.
Afraid of lease/comfortable buying.

Why I leased instead:
Low on cash, preferred nicer vehicle.
Wanted added insurance coverage.
Need low payments/wanted nice vehicle.
Didn't want to sell vehicle later.
Saved on taxes and/or finance charges.

A FEW ADDITIONAL DETAILS YOU SHOULD KNOW
1. Don't plan on walking away from your lease (or purchase) early. You have the ability, but you may have a negative payment to make if the depreciation that has occurred (you can't stop it!) is greater than your payoff. Don't sign a contract for longer than you plan to keep the vehicle. Leasing agents are able to take a negative from a previous sale or lease and tack it onto a new lease but this is not advisable unless you can't stand your old vehicle.

2. Don't be too concerned about interest rates with a lease. At the present time rates are not disclosed because they are too complicated for the lessee to understand (see #3 above). The leasing company is paying the interest but they are also assessing you a fee for the vehicle use. Pay attention to the original cost, the total of payments and your end of term options. You can determine your overall cost with these and walk away if you're not happy.

3. If you lease or buy, take care of the vehicle!!! It will be worth more if you treat it properly. Remember, if you purchased, it's not yours till you pay for it! If leased, you can be charged for turning in an "abused vehicle", or for any excess mileage over the original disclosure (so be honest at the start and let the leasing company put you in a proper lease) Your lease terms will cover both of these items in detail, so read carefully.

4. If you wonder why leasing companies are in the business, considering the risk they take, here are some reasons and important facts:

a. Certain tax advantages accrue to lending institutions when they write a lease, but NOT if a vehicle is purchased.
b. Manufacturer leasing plans (GM, Ford, Chrysler, etc.), love leasing because they can move more product faster and are very liberal with high residual values on short term leases, mostly because they have a dealer network to help dispose of vehicles at lease end. They also occasionally provide "subsidized" lease rates to those dealers, which result in lower payments for a lessee. This helps build brand loyalty and high customer renewals.

Thousands of Satisfied Customers
Over the last 12 years Smart Shopper Solution Inc. has saved consumers millions of dollars on car purchases.  Feel free to check some of their smiling faces.