Every day, AMS Auto Leasing specialists receive questions from clients about leasing and what it really means to them.

We want you to have the facts.

How does leasing a new car compare in cost versus buying it?

FACT:  Leasing can actually cost less in the long run. Besides the lower up front costs and monthly payments of leasing, consider the economic power of money that's not put into the down payment and large monthly payments on a purchase deal. Investing that money or buying down debt could put you ahead financially, compared with tying up money in a vehicle, which is losing value. In addition, most leases offer GAP insurance, which covers the difference between the lease payoff and the insurance settlement if the car is totaled or stolen. This is usually not available when you buy a vehicle.

There's equity in buying, but is there any equity at the end of the auto lease?

FACT:  Buying a new car is not typically a good investment, since the vehicle depreciates. The value of a vehicle may be considered equity only if the amount owed on the vehicle loan is less than its value. Leasing offers the potential for cash value at the end of its term; and keeps your equity out of the vehicle. Utilizing lease advantages, like no or low down payment and low monthly lease payments, to end up further down the road with the vehicle. At the end of a lease agreement, the vehicle value and amount owed roughly equal the same as if a conventional loan used.

Is it true that you will always make car payments, even at the end of a lease agreement?

FACT: At the end of most leases, the contract entitles you to buy the vehicle at a set price. If you choose not to buy the vehicle, you can just walk away. Had you purchased the car, you would be stuck with selling it or trading it in, at a price that may not meet your expectations.

At the end of a lease, do additional expenses magically appear?

FACT: If all requirements concerning vehicle condition and mileage are fulfilled, there is no further obligation at lease end. You may simply walk away, purchase the vehicle for a predetermined value or lease another vehicle.

Are wear and tear charges the same in leasing a car versus buying?

FACT: Regardless of leasing or buying your vehicle, you would face the same financial hit for wear and tear. The lease contract just puts that reality in black and white.

Is it true that early termination fees exact a heavier penalty than changing your mind when you buy a car.

FACT: Whether you lease or take out a loan, the decision to bail out early comes at a price. If you purchased the vehicle, the loan balance may be far more than what the car is worth. If you leased, the vehicle may be worth far less than its residual value, particularly if you made no down payment. The lessor uses the early-termination fee to compensate for that loss.

Is it a mistake to lease if you put high mileage on a car?

FACT: High mileage takes its toll, whether you lease or buy. When you buy, the cost comes as a lower trade-in value. When you lease, your cost is out of pocket when you turn in the car. To avoid such an expense at the end of a lease, AMS Auto Leasing will structure your lease to your driving habits using a realistic number of miles over the right number of months.

Is it true that leasing only makes sense for vehicles used in business?

FACT: The Tax Reform Act of 1986 removed the incentives for individuals to purchase vehicles, since buying no longer offered deductions for sales tax and consumer interest. As a result, leasing is definitely a viable option for personal use drivers who change vehicles every few years.