I was planning to buy a new car for about $18000. I rarely drive and probably drive less than 5000 miles every year, but for various reasons I need a car. I am replacing my current car because it is more than 10 years old and in need of repair. Repairing it will be quite expensive.
I noticed that I can get a 3 year lease on the same car for about $100 dollars a month with no money down. That is much less money spread out over a much longer period. The lease has mileage restrictions, but I can easily meet them.
The lease seems like a better arrangement for me, but most sources suggest that the lease is almost always a bad deal relative to buying. I can buy the car without a loan. Should I buy the car with cash or go ahead with the lease? What am I failing to consider (insurance, additional liability)?
UPDATE WITH MORE DETAILS:
It is apparently not just the $100 a month. There are $2000 in fees at the start of lease. Assuming I don't buy the car, I will pay an additional $500 fee at the end of the lease.
I assumed the car will depreciate by 40% ($7200) over three years. Maybe this is too much considering how little I drive.
$100 * 36 + $2000 + $500 is $6100, which is less than what I expect depreciation to be. If I discount the future lease payments and the future sale price of the car then the lease becomes even more attractive.
Other considerations: I really don't want to get a new car, but I need a cheap, safe car for a few years. It feels to me that there is less uncertainty with the lease, because I don't have to worry about selling the car at the end. At the end of the lease, I may buy a new car or I may stop driving entirely.