New XC70 - lease or buy

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.

 

That question can not be answered in the abstract as you wish. Amoung the
questions that need to be answered are: what sort of use, business or
personal, and how much of each. Who is the lessor and what terms are
available? What are the personal property rules in your jurisdiction? Will
you have the right to sell the car yourself and make a windfall profit at
the end of the lease? There are many other considerations as well. If you
would like to email me with more information I would be glad to try and
direct you to the answers to your question.

 

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 www.LeaseGuide.com/index2.htm

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.