Saturday, August 12, 2006

To Buy or To Lease, That is the Question

While my van was being worked on yesterday, I took a short walk to the local Nissan dealer. I really wasn't wanting to buy (and didn't); just wanted to take a walk and also to see what they had for sale.

As I was wandering through the vehicles, a salesman came up. He introduced himself as Tom and asked if he could help. I explained that I was just looking at the moment, just getting a feel for what Nissan had to offer.

After talking about my vehicle needs, he showed me a Nissan Quest. I'm not sure whether it was a 2006 or 2007, but it was nice (I didn't like the colors, but that's another story). It had more than we needed (such as a DVD system), but I did like that the seats folded flat and the rear seat actually folded down into a well making the cargo area just about as flat as a passenger vehicle could be.

Anyway, back to the original premise of this post, he asked if I were interested in a lease. In the past, I would have run screaming from a lease, I have never believed it was smart to lease if you could buy. Well, after seeing some of the lease options being offered, it might be a viable way to go, depending, of course, on your financial situation and on the conditions of the lease.

But there's the trouble: I haven't looked further into the question than what I've seen in the ads. I have to admit, I do like that the lease payments for a new vehicle can be less than I am currently paying on a used vehicle. Since so many people don't keep a car much longer than what a lease term would be (36-39 months is what I've seen), it might make sense for them. Cars are fairly disposable, after all, or so it seems. I personally keep cars until it's cheaper to trade than repair. Is that the smart way to go?

But what happens at the end of the lease? I know (or think I know) that you have the option to purchase the vehicle, but if you choose to turn it in for another, newer model, can it be used as a down payment? If you compare it to the rental of an apartment or house, you have no equity in the dwelling to use (aside from perhaps a deposit refund). So, if that's the case, you're on the short end if you don't have a down payment to buy it or another vehicle. Can the lease be extended if you really, really like that vehicle?

Okay, my very intelligent readers, can you give me insight into the buy or lease options?

No comments: