Financing Options: Leasing a Car

Assume you are teaching the class about leasing vehicles. Create a handout that includes the
most important facts about leasing a vehicle.

The Pros and Cons of Leasing:

- Pros:
- Monthly payments on a leased vehicle is always lower than the monthly
payments from buying one.
- You can drive the car during its “trouble-free” years.
- You can lease a car you might not have been able to afford if you bought it.
- Cons:
- If you only ever lease a car, you’re constantly paying a car payment that could’ve
gone towards buying the car.
- You’ll have to pay thousands if you decide to get out of the lease early.
- You have to return the car at the end of the lease in the state it was purchased
(excludes window tinting and typical wear and tear) so no customizing.

Where do you land given the pros and cons outlined?

I’m on the side of buying a car rather than leasing it. I think that there are great car
options out there that won’t force you to pay an arm and a leg each month. We got a 2016 Ford
Escape for $9,000 and we paid it off within a year of buying it. The car is ours now and we can
do whatever we want to it without fear of having to pay thousands to a dealership should
something happen to it.

Cite your sources:

- Personal Finance 12e by E. Thomas Garman and Raymond E. Forgue, Cengage

Learning, 2012
- https://www.consumerreports.org/buying-a-car/leasing-vs-buying-a-new-car-
a9135602164/