I'm about to replace my 1998 V70 with a 2004 XC70. I plan to keep it for about five years, probably will put 12,000 miles a year on it. Assuming I can the best price on a purchase price and also on a lease price, which way would you go? Lease or buy?
Many thanks.
When you say you want to keep your car at least five years, this almost certainly says you don't want to lease. You really shouldn't lease for a term that is longer than the general bumper-to-bumper warranty which, for Volvo, is four years.
For more details on lease vs. buy, see
Al
if the car is for business use (usa tax law) and you can deduct 100% of the lease pmt & maint costs...lease it...
if the car is for persnl / family use , i would look at buying it...unless cash flow is critical...then, a lease pmt is better / lower....but, it is worse in the long run to lease.. unless business related and 100% business expense...imho...
Personal use. Lessor, I assume, would be Volvo finance. And U.S. tax laws prevail on this one.
If it is a typical lease/purchase such as Volvo finance, then purchase is usually the best deal. However, on occasion sellers will sell to the leasing company for less than they will sell on the market. Also, sometimes the leasing company will use a below market interest rate to make themselves more competitive. You need to be careful though, in some jurisdictions both the lessor AND the lessee end up paying personal property tax, this can be a killer. You need to pay close attention to the residual value being used. In some leases, you are responsible for any shortfall on residual. Usually the best way to lease for personal use is to use a 36 month lease with a guaranteed residual value. At the end of the lease you can exercise the purchase option and buy the car. This can work out pretty well if the deal is good to start with. I have leased cars for much less than I could purchase them, when the situation was in my favor. Work the deal both ways and take your best shot. Since it's for personal use, not business, the tax implication are negligible except for the personal property tax issue.
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