In spite of its surging popularity, numerous misconceptions about vehicle leasing remain:

Misconception #1: Leasing a new car costs much more than buying it.
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.

Misconception #2: There's equity in buying, but nothing at the end of the lease.
Buying a new car is not typically a good investment, since the vehicle begins to depreciate the minute you drive it off the lot. Its value may be considered equity only if the amount owed on the loan is less than its value.
Leasing offers the potential for cash value at the end of its term as well--by keeping your equity out of the vehicle. The cash flow derived from no or a lower down payment and lower monthly payments during the life of the lease, together with interest, can produce an amount roughly equal to the used vehicle's value at the end of a conventional loan.