ToddLuc

I have purchased and leased multiple cars over the years. I have found leasing to be more cost-effective for many reasons... most of which have already been posted.

If you keep the Z for one year, as you ask, then you are going to be upside-down regardless of lease, or purchase.

The difference will be that with a lease, you will pay the interest for the entire term, where the purchase will be the remaining principle.

In the one year lease case, you are 12/nth paid off, where n is the number of months in your term. (36/48/60). In the purchase case, you have paid mostly interest, and you have not paid much in the way of principle. The end result is you are typically more upside-down in the purchase case than the lease case for this scenario.

I typically come close to the end of a lease, and trade in the car (as I will do here again). In this case, I simply buy out the car, which is remaining payments + residual.

Hope this is helpful,
Todd

vanstorm16

At the end of the lease, you can always take a look at the residual value and what the market value is on the car and make a decision based on that as well. There is always the option of buying out the residual value and selling hte car if you do not want to have it anymore.