lease vs buy with bad credit

[enharu]

It's just not worth accepting a high interest rate for an auto loan in this current economy.

As evident from the example by rush, you often end up paying a lot more - enough to buy 2 or more of the same car, and you end up with only 1. For a secured lien to have such high rates it's pretty much daylight robbery.

Leasing may work out better for certain individuals, but you generally need good credit for the lease to be viable in the first place, because you can't really refinance it.

1. Sometimes leases are tax deductible, depending on your job / company.
2. Most leases include gap insurance, so if you end up crashing the car, you are not affected by the depreciation due to car accident. If the car is yours, you will be taking the hit yourself when you sell the car.
3. If you can make out a good lease agreement, all you are paying for could just be depreciation. You are going to lose that money either ways regardless of whether you buy or lease.
4. You don't pay full sales tax on the car. This is a big difference for expensive cars in states with high sales tax.
5. If you have better use of cash flow, such as for investments etc., a lease may work out better as you fork out less money.
6. You get to change a new car every 2-3 years.

There are also cons of leasing and benefits of buying, so it really depends. I was very interested in leasing my BMW, but ended up purchasing because I cannot mod a lease vehicle. I also leased a Lexus IS for my brother who just got his license recently. Payment amounts are good, and we also bought additional coverage on the car. If he ends up denting / scratching / crashing the car, we are covered. For new drivers you have a better piece of mind, in a way.