<prompt> Human: Pretty much i am out of a car and its not worth it to fix the broken one... i currently have no money to purchase a new vehicle and the downtime of not having a car will be terrible. Just started a new job and planned on buying a newer used car but now i really cant save for a nice car... do you think leasing a car and then eventually buying it out is a good idea?If you were in my situation what would you do?  <response>: Absolutely, But its in very specific situations. When you purchase a new car they come with incentives. Incentives can be anything from Truck Month Incentive to Ally Bank Incentive to Chrysler 200S trim package incentive, and everything in between. What the dealership dose when you purchase a car is they take the MSRP sticker price and deduct the incentives you qualify for off the price, then they deduct your down payment, and then finance the rest of the price over the term of your loan, and include interest. When you lease they do the same except they also deduct the buy-out price, or the price they believe the vehicle will be worth in 3 years if you have a 36 month lease. And then take that total price and divide it by your lease term and then add interest. Where leasing becomes better than purchasing is when you personally qualify for more lease incentives then purchase incentives. And if you dont care what you drive color, trim, even type of vehicle Since there are almost always under-performers on the lot that can bank you a ton in lease incentives, but not in purchase incentives. For the most part, leasing will qualify you for every single purchase incentive, but not the other way around. Three incentives that you will never get with a purchase are Conquest Lease incentive, Returning Lessee Incentive, and Lease Loan Incentive. But the first two require you to already have a lease in your house or two leases to get both incentives. Also, leases almost always have much lower interest rates than purchasing a vehicle. Example. You find a car that you like and its 30,000. It comes with an end of year incentive for 2,000A Trim package incentive for 1,500And you qualify for a loyalty incentive of 500. If you purchase that car you will get 4,000 off the sticker price. If you put 1,000 Down you will finance 25,000 for 60 months, with good credit you can get an interest rate of 5 and pay 450 a month. In three years you would have paid total with payments and down payment 17,000, And the vehicle will be worth 15,000, and you will owe 11,000. You could sell it or keep it, but you are in for a total of 13,000 for the three years. Now if you qualify for all the extra lease incentives Lease loan incentive, conquest lease incentive, returning lease incentive, you will get the 4,000 in incentives you qualified for with the purchase, but also the two other lease incentives that can be 3,000 or more. With a 3 year buy-out price of 15,000 and a 36 month lease term. The numbers will look like this. 30,000 car, - 7,000 in incentives, 23,000 total price, - 15,000 buyout 8,000 - 1,000 you put down 7,000 total price for 3 years. With good credit your interest can and often is under 1 on a lease. So your payments will be 200 a month for 3 years. And at the end of those three years you can buy it for 15,000 or turn it in. You would be in for a total cost of 8,200 for those three years, or 2,800 LESS then if you purchased it. And your payments would have been less than 12 the amount leaving you with more money in your monthly budget. ---TLDRIf you want to always have a brand new car, under warranty, with free roadside, free oil changes, free loanerrental, free satellite radio, new tires, all the most modern safety and creature comfort features, AND you dont care exactly what you drive, leasing is the way to go. BUT you will forever have a 200 car payment FOREVER. If you dont care about those things and dont mind having an older car where things go on it and you have to deal with that, and you you are responsible for all the maintance and other things, you will be able to own a vehicle for less than 200 a month on average. It really depends on what you want, what you need, and how picky you are about what you drive. 