The difference between buying and leasing
“When you buy, you pay for the entire cost of a vehicle, regardless of how many miles you drive it…When you lease, you pay for only a portion of the vehicle’s cost, which is the part that you “use up” during the time you’re driving it.”
So in general you are paying for the depreciation of the car, then at the end of the lease you can either give the car back or purchase the car outright at the pre-determined amount.
Note: Subject to the type of lease you may not have the option to buy out the vehicle at the end of the lease term. If the lease is a “closed end” lease then you will not be able to buy the car out at the end. This type of lease is commonly used by companies. If you wish to have the option to buy out the car at the end be sure to set up an “open end” lease. In this type of lease the residual will/should be stated in the contract. You will then have the option to pay the residual plus taxes and transfer costs in order to buy the car if you wish to. Consult with your MickLay.com before you enter into a lease in Tokyo.
Buying or Leasing which is better?
There is no correct answer it all depends on your current circumstances. If you are planning to stay in Japan for the long term and want a new car every 2 to 3 years or you are only in Japan on a 2 to 3 year contract then leasing might make sense. Or if you don’t want to make a sizeable upfront payment and would prefer to pay for the car monthly then leasing would be the way to go. If however lower long-term costs are important, then buying outright might make more sense.
Some points to consider when buying or leasing your car in Tokyo
- Make sure you understand how a lease works and if you have questions ask.
- Short-term costs of leasing are always lower than short-term costs of buying. The long-term costs of leasing are always higher than the long-term costs of buying, assuming that you keep the car you purchase outright for a number of years after your loan is paid off.
- If you lease for the length of the manufacturer’s warranty, you’ll never have to pay for major repairs.
- You can lease without a upfront payment, but making one will lower your monthly payments.
- Terminating a lease before it’s up can be costly.
- Since you don’t own a leased car, you can’t change it, paint it, or add equipment to it.
- The best cars to lease are those with the best book value after the term of the lease. Stay away from cars which depreciate quickly unless you’re willing to pay more and can afford to do so.
If you have any questions about what the best value car is contact Mick Lay Motors today! If you have any question regarding what might be better for you contact us.