Leasing Means You Buy the Leasing Company a Car
In return, they let you use it — but it’s still their car
In our minds we tend to think “lease” and “rent” are the same, but with cars they’re not.
You can rent a car for a weekend trip and be responsible only for the required insurance, gas and parking fees. The car rental company is responsible for all the other ownership expenses.
When you lease, you’re responsible for everything, but you have none of the advantages of owning the car (except driving it, but that’s limited).
I remember discussing car leasing with my uncle over 25 years ago. He pointed out that dealers love it. “And if it’s good for the dealer, it’s bad for you.”
That may not apply to everybody in every situation, but don’t fall into the trap of believing leasing is just another way of paying for a car.
When you buy a car, you have equity in an asset. It is a depreciating asset, for sure. That is, its value goes down with the passage of time. You will never get a 100% return on what you pay for it.
That depreciation is one of the expenses of owning a car. Others include buying gas, insurance, license plates and replacing wornout tires. The leasing company pays for some of the maintenance, but — unlike a rented car — some things are your…