Ownership vs. Usership
The decision isn't just financial; it's philosophical. Do you want to pay for the whole car (buying) or just the part you use (leasing)?
Buying: The Long Game
Monthly payments are higher, but eventually, they end. Once paid off, your "cost per mile" drops drastically. You also own the equity, meaning you can sell it later to recoup costs.
Leasing: The Cash Flow Play
You maximize cash flow today by paying less per month. However, you are in a perpetual cycle of payments. You never "own" anything, so you have no asset to trade in later.
Dealers often quote the "Money Factor" (e.g., 0.0025) because it sounds like a small number.
Do not be fooled.
to get the APR, multiply the Money Factor by 2400.
0.0025 × 2400 = 6% APR.
Always ask for the Money Factor and convert it to APR to see if you are getting a fair
interest rate compared to a bank loan.
Lease FAQ
Gap insurance covers the difference between what the car is worth and what you owe if it gets totaled. Most leases include this automatically (Gap Waiver), but verify this in your contract.
NO. Never put money down on a lease. If you total the car as you drive off the lot, that down payment is gone forever. Roll all taxes and fees into the monthly payment.