To lease or buy?

[HRC]

Hi all,

If you only want to pay $200 a month and are only willing to spend up to 10k if you're buying, which way would be better to go: leasing or buying?

[MagicRat]

Lets assume the following things......

Interest rate for borrowing is 3%, compounded annually.

If you bought a car for $10,000 now, it will be worth only $3000 when you sell it in a few years.

Now, according to my financial calculator, the break even point is 3.17666 years.

This means if you plan to keep the car for more than 3 years and 3 weeks, then it is better to buy it.

If you plan to keep it for less than 3 years, 3 weeks, you are better off leasing.

[HRC]

Thanks! Very helpful.

[Jamesfranklin]

It is better to buy as in leasing you have to pay the double amount you have taken from the market. Therefore it is advisable to buy instead of taking anything on lease.