When you compare you need to consider the couple of things – Price, Resale value, Performance, Longevity, Mileage, Advanced Technology, FWD/AWD.
Also compare in between apple and apple. For example, Honda Civic may comparable with the Toyota Corolla; Honda CRV may comparable with the Toyota RAV4; However, Mazda CX9 is not comparable to Highlander or Pilot due to its significant lower resale value though brand new price is similar.
Now come to the money matter. Here, I will ignore the time value of money instead, focus on interest rate comparison for simple understanding of all types of readers.
When I say purchase, where’s the source of money. If it is in my saving account, no question. But if I borrow it from my line of credit, or loan from a bank then what is the interest rate? Does it lower than what the car seller is offering? If not, purchasing by borrowing the money may not be a better decision.
In general, the interest rate for leasing is lower than financing. If you see both are the same, then certainly financing is the better decision since you will be the owner of the vehicle at the end of the contact. However, if you see o% down and 1% lease, and you have an intention to buy it out after the lease period of 4 or 5 years, compared to 3% or above interest rate for financing, then lease would be the better decision.
There is a tax consequence. When you take the lease, you only pay tax on your lease payment whereas when you are financing, the tax is calculated on the total vehicle price and then calculate the monthly payments. Therefore, per month finance payment is pretty higher than the monthly lease payment. If your income is static and no chance of ups and down than Finance is better with an equal monthly payment for next 7 yrs or 8 years. However, if you would like to pay low now and agree to pay more after the 5 years, then lease may be more preferable to you and you may pay the more tax when you will proceed to own the vehicle.
When it is leased you may count more money for scratch or small damage if you do not want to buyout. On the other hand, you have the opportunity to drive a new car at the end of the lease time, especially if you like to enjoy the advanced technology!
Insurance point of view, if you purchase you may only take the third party insurance which is cheaper though the risk is higher. Lease vehicle needs the full insurance always means unavoidable costs.
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