Vehicle Purchase: Buy vs. Lease

October 22, 2003 -- Posted at 10:45pm

JONESBORO, AR - If you stop by nearly any dealership in America, sales workers are ready to bargain for a deal. "Right now's a busy time. We're trying to clear out the '03 models and we're getting in the '04s daily," said Rich Fegtly, manager of Central Nissan.

However, before you get that bargain, you may want to consider how you finance it: buying versus leasing. "If you're not buying it for a business and writing off the taxes, I would definitely buy it to build equity in the vehicle," added Fegtly.

If you drive more than 10 miles to work, you have enough money to pay for the vehicle price in full or you like to customize your car, you should buy it. If your company is paying for an automobile, you like to trade in often, or if you have your own business, lease it.

"The leases have some up-front charges: first month's payment; security deposit," explained Fegtly.

The number of miles on a lease is usually limited to 12,000 miles per year; sometimes 15,000. Most leases are for 3 years. Not many Nissan, Pontiac or GMC customers choose to lease their vehicles.

Rich Fegtly said, "Most cases you have to won the car at least a year to get past some lease penalties. After that, you can either turn the car in or buy it for the remainder of the note."

Fegtly added that the market is also ideal for buying 'new' versus 'used, because finance charges are so low and rebates are high. Now you just have to decide to buy or lease.