Lease Or Buy?

In reality, leasing and loans are just two different methods of automobile financing. Leasing finances the use of a vehicle for a certain period of time, and a loan finances the purchase of a vehicle. The third option is to finance the purchase of a vehicle with cash, although fewer people actually do this. Our tool is the only tool available that lets you compare leasing to purchasing with cash and purchasing with financing. It is not possible to say that one of the three methods is always the best way to pay for a vehicle. The only proper way to do this is to look at all of the tax and financial considerations of the question. For personal use automobiles, the decision will mostly be a financial one. Leasing and purchasing will have significantly different cash flows, and a proper analysis must take these differences into account.

Financial Comparison

Alpha Leasing Company has developed the most comprehensive lease versus buy anaylsis available on the market today.  Most sites give you a financial calculator that just adds up the payments and gives you the difference.  Our financial calculator also takes other things into consideration.  We look at what you are going to do at the end of the evaluation period.  We also look at the differences in the timing of the cash flows between leasing and purchasing and what you are going to do with the money.

 

 

 

 

Leasing typically will have payments that are significantly lower than loan payments on the purchase.  What are you going to do with this excess cash?  If you stick it in the bank in a savings account you might be getting 3% on your money, but if you make extra payments on your credit card, you are in effect getting an 18% to 21% return on your money.  This difference alone can make thousands of dollars in differences in your lease versus buy analysis.  No one else goes into this detail.

Business Use Vehicles

For business-use vehicles, the tax law treats the buying and leasing of vehicles quite differently. In many cases leasing enjoys many tax advantages over purchasing. Lease Rates can help you determine if these tax advantages can help you save money.

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Did you know that depreciation is severely limited for vehicles under 6,000 lbs?

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Did you know that cars and trucks are depreciated differently?

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Did you know that SUVS have different Section 179 limits than other vehicles?

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Did you know that if you take a large Section 179 expense on a vehicle and then sell it 3 or 4 years later, that you will be facing a large tax bill?

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Do you know all of the options for reimbursing employees for the business use of their vehicle?

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Is it better to place a vehicle in the business name or your personal name?

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Our experts have integrated every relevant tax law into our analysis tool so that we can give you the definitive answer on whether you should buy or lease your business use vehicle. Our analysis is completely free and there is no obligation for using it.

Reasons for Leasing

No Down Payment Financing

Leasing eliminates the down payment that can be required when purchasing a vehicle. With 100% financing available, leasing allows valuable cash to be used for other purposes. If you want, you can make a down-payment to lower your monthly payments.

Lower Monthly Payments

With leasing you pay for the portion of the vehicle that you actually choose, not the entire vehicle. Since leasing is a lower cost means of financing your payment will typically be 25% to 50% lower than a loan payment, saving you hard earned dollars each month.

Get More Vehicle For The Same Money

A significant benefit of leasing is the option of driving a bigger, more expensive vehicle for the same payment when compared to buying. The choice is yours: The identical vehicle for a smaller payment, or a more expensive vehicle for the same payment. You should never get more vehicle than you can afford, whether buying or leasing.

Flexibility: payments tailored to individual needs

Leasing provides many options in creating a monthly payment best suited to your needs. Because of this flexibility, leasing a vehicle is easier than owning one.

Fewer Maintenance Problems

Leasing means that your car is under manufacturer's warranty for all or the majority of the lease term. You will have fewer maintenance issues and most will be covered.

Tax Benefits

In most states, you don't pay sales tax on the entire vehicle when you lease. You are only taxed on the portion of the vehicle you use, and the tax is spread out over the monthly payments instead of upfront lump sum. Tax laws overwhelmingly provide better tax benefits when leasing for business use, with the payment being fully deductible, except for the lease inclusion. This can be a major consideration for business vehicles under 6000 GVWR.

Leasing is Better for Your Credit

For individuals, leasing has less of an impact on your credit than a loan. For businesses, leasing is considered off balance sheet, and doesn't count against many loan covenants.

No Used Car Hassles

Leasing eliminates trade-in hassles. At the end of the lease, just turn in the car and keys to the leasing company. Plus, you have the option of purchasing it if you want.