Lease vs. Finance: An Enthusiasts Perspective
What is your penchant for change?
I think this is the biggest factor. Do you like having new cars often (2-3 years) or do you keep your cars for over 5 years? If you like to flip cars often and don’t want to lose your shirt every time you switch cars, leasing may be your better option. As we all know, most cars take a huge hit in depreciation once you drive them off the lot. You can avoid this by leasing. Obviously, you don’t own the car but you don’t own the negative equity either, assuming you run the contract of your lease. When you purchase a car - unless you buy a newly released Ferrari or Lamborghini, trying to flip early is difficult due to the negative equity that accrues in the first few years of ownership.But I like to modify my cars...
Contrary to popular belief, you can modify a leased vehicle. The usual warranty concerns apply, but as long as you return your vehicle to stock form upon lease return you’re golden. Some manufacturers (BMW most recently) are even offering performance aftermarket parts from the dealer, this allows you to finance parts into your deal if you like.
More car for your monthly.
Leasing gets you more “car” pricewise for your monthly payment. Unless you put a HUGE down payment, this will always be the case. Leasing is a great way to get into a high sticker price vehicle without putting a fortune down and paying high monthly payments... saving more money for your mods!
What about warranty?
Whether you lease or purchase your vehicle, the same warranty applies. When you modify any part of your car, the part you replace generally comes off of warranty, as it is no longer in use.
Commitment issues.
As enthusiasts, we are always looking for change. Leasing a vehicle is a way to work your way in, discovering whether you in fact want to keep a car long term. If you work the terms correctly, you can effectively try out the vehicle yet pay close to the same total purchase price in the end if you decide to keep it. Think of a lease as "pay as you go." When you purchase a car, you’re paying for it until it’s completely paid off.
