Consumer Reports Tests Car Buying Versus Leasing
Average Price Of Car Is $28K
Updated: 4:37 pm CDT April 14, 2008
MADISON, Wis. -- The average price for a new car is more than $28,000 and is prompting many to wonder the benefits of buying versus leasing a vehicle.
VIDEO: Watch The ReportWISC-TV and Consumer Reports looked into which is the better option: to buy or lease.Online calculators are available on many Web sites, but might not give consumers all the information they need to make the right choice."Online calculators can be great but they may not tell you the whole picture," said Consumer Reports money advisor Tobie Stranger. "For example, they may not capture the financial data like sales tax, insurance costs or acquisition fees."The experts at Consumer Reports calculated the difference between a five-year loan and leasing a vehicle for five years. They also factored in a new lease after the third year.The first comparison was a 2008 Honda Accord EX. The car sells for $24,495, and can be leased for $239 a month.The calculations show the lease costs $4,500 more than if a consumer purchased the vehicle."That calculation doesn't even include the end of lease costs, which can include excess mileage and wear and tear charges," said Stranger.The next comparison was for a 2008 Lexus ES350. The vehicle sells for $38,405 and can be leased for $429 a month.In this case, the calculations show the lease costs $9,000 more than if the consumer purchased the vehicle."Monthly lease payments have dropped dramatically in the last five years, some 44 percent so they can seem really attractive but that doesn't necessarily mean you're getting a better deal," said Stranger.Experts also said consumers need to consider that a leased car can end up being more expensive to insure than one purchased.
VIDEO: Watch The ReportWISC-TV and Consumer Reports looked into which is the better option: to buy or lease.Online calculators are available on many Web sites, but might not give consumers all the information they need to make the right choice."Online calculators can be great but they may not tell you the whole picture," said Consumer Reports money advisor Tobie Stranger. "For example, they may not capture the financial data like sales tax, insurance costs or acquisition fees."The experts at Consumer Reports calculated the difference between a five-year loan and leasing a vehicle for five years. They also factored in a new lease after the third year.The first comparison was a 2008 Honda Accord EX. The car sells for $24,495, and can be leased for $239 a month.The calculations show the lease costs $4,500 more than if a consumer purchased the vehicle."That calculation doesn't even include the end of lease costs, which can include excess mileage and wear and tear charges," said Stranger.The next comparison was for a 2008 Lexus ES350. The vehicle sells for $38,405 and can be leased for $429 a month.In this case, the calculations show the lease costs $9,000 more than if the consumer purchased the vehicle."Monthly lease payments have dropped dramatically in the last five years, some 44 percent so they can seem really attractive but that doesn't necessarily mean you're getting a better deal," said Stranger.Experts also said consumers need to consider that a leased car can end up being more expensive to insure than one purchased.All Consumer Reports material copyright 2008 Consumers Union of U.S. Inc. All rights reserved.
