to pay lum-sum? or to not

[uahmd88]

is it better to pay cash for a car? for example. is it a smarter idea to pay 25000 for a camaro as opposed to leasing it? is interest on such a lease a tax exemption on federal tax computation?

suggestions please.

 

[AllanMadan]

Please expand. Is this for personal use only? Or business use?

 

[The Finance Writer]

Yes, it is "better" to pay cash than to utilize a financing option. Any tax benefit from the financing will not offset the higher economic cost.

 

[BentonHarbor]

is it better to pay cash for a car? for example. is it a smarter idea to pay 25000 for a camaro as opposed to leasing it? is interest on such a lease a tax exemption on federal tax computation?

suggestions please.

Look at it this way: If you lease the car, then the guy who owns the car and leases it to you is doing it for only one reason: to make money. Unless you can follow the terms of the lease exactly, it's better to own the car. If you lease the car, you get no credit if you drive less than the contract, but you pay a whopping extra if you drive more than the contracted number of miles. Yes the payments are less than a loan, but at the end of a 4-year loan, you still have a car.

Two examples: (A) A neighbor used up all his miles five months before the lease ended. He let it sit in the garage for five months while he continued to make the lease payments. His wife had to drive him to the train each morning because he could not afford another car payment. (B) A co-worker took out a 3 year lease. The engine blew three months before the end of the lease. He had no choice but to put in a brand new engine. When the lease was over, he turned back a three year-old car with a three-month old engine.

There is no interest on a lease. You are making lease payments. Whether the lease payments are deductible depend on its usage.

I just don't understand why people lease cars or buy lottery tickets.

 

[colormered]

Plenty of business men and women lease cars,they get a new car every year and folks think they must be doing well.
But like they said once you lease,you lease forever.