Automobile dealerships frequently advertise low monthly lease payments to entice shoppers. However, continuous leasing creates an unending cycle of monthly payments with zero equity accumulation.
The Real 5-Year Cost Breakdown
When purchasing a vehicle, you absorb depreciation early, but by year 4 or 5 the loan is retired and you retain substantial trade-in equity. Over two consecutive 3-year leases, you pay the steep early depreciation curve twice with zero remaining asset value.
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Frequently Asked Questions
When does leasing make financial sense?
Leasing can be advantageous for business owners writing off lease payments as business expenses, or for drivers who insist on driving a new vehicle under warranty every 3 years.