They are soooooooo cute, those little smartfortwo cars that get all the attention and can park almost anywhere.

There are three different new 2012 models, the pure coupe, the passion coupe, and the passion cabriolet convertible. An all-electric model is coming soon.

The smartfortwo cars are built by Mercedes-Benz and even though small in size, are one of the safest vehicles on the road with stability control, anti-lock brakes, a protective “safety cell” with eight air bags for superior crash protection.

They get excellent gas mileage (38 MPG on the highway), are comfortable, have plenty of head and leg room, and come with a unique automatic/manual transmission. They come in a number of stylish base colors, with interchangable color body panels.

The company is currently offering a $99/month lease deal on the 2012 smartfortwo pure coupe. It’s for 36 months and requires $999 cash down. This is the cheapest lease payment we’ve ever seen on a brand new car for 36 months. If you are in the market for a great little first car at the lowest monthly payment, this is the one.

You can go slightly more upscale with more features on the smartfortwo passion at $139/month for the 2012 passion coupe, 36 months, $999 down, or $199/month for the 2012 passion cabriolet, 36 months, $999 down. These are great lease deals as rated by LeaseGuide.com.

If you prefer not to lease, all these vehicles can be purchased with a 0.0% APR loan rate for up to 60 months.

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Although we’ve discussed this topic previously (see Lease vs Buy), there is one aspect that we haven’t discussed and continue to hear questions about.

The question is essentially this: “If a car dealer is offering a special promotional lease deal, a purchase rebate, and a low interest loan on the car I want, which one is the best deal?”

The short answer to this question is that the lease deal will nearly always be better — and it’s not simply because monthly payments are less. If the lease deal is one that is being offered by the car manufacturer, the company has usually applied a price discount, a low money factor (finance rate), and a high lease-end residual value. The combination of all these things makes for an attractive low monthly payment. Customers are not able to negotiate these kinds of deals for themselves  because a dealer only controls one of those three things — price.

Lease vs Buy? What’s the Difference?

One of the best ways to decide between car leasing and buying with a loan is to directly compare the attributes of each, which we will show you in this article. We’ll tell you about how payments compare, about how fees are different, about advantages, and disadvantages.

Another way to help make a decision between leasing and buying is to compare the cost of each for a specific lease vs. buy situation. For this, you’ll need a special Lease vs. Buy Calculator.

Now, let’s take a look at how car leasing compares with buying with a loan.

What are the advantages and disadvantages of car leasing?

Car leasing has it’s advantages and disadvantages. Here is a summary:

Pros:
- Get new car every 2-4 years, with latest features and safety equipment
- Lower monthly payments
- Usually no down payment
- Car is always under warranty
- Lower sales tax (in most states)
- Avoids used car selling/trading hassles
- Automatic GAP insurance included (most leases)

How Does Car Leasing Work?

Car leasing is extremely popular because it offers a more affordable method of auto financing. It allows you to have lower monthly payments than with traditional auto loans. About one out of every five vehicles driven by automotive consumers in the United States are leased.

But car leasing is not for everyone. Is leasing good for a teen’s first car? What are the pros and cons of leasing?

Leasing is a little more complicated than buying with a loan, so you should take the time to learn about leasing, and be sure it’s right for you before making a decision.

What is a Lease?

Both leasing and buying a car with a loan are simply two different methods of financing. Where a purchase loan is a method of financing the ownership of a vehicle, leasing is financing the use of a vehicle for a specified number of months, similar to renting but not quite the same thing.

How to use a Lease vs Buy Calculator

When you use a Lease vs Buy Calculator such as the one at LeaseGuide.com, you should understand how it works and how to get the results you want.

Car leasing is a little different than buying a car with a loan. The language is different, the process is different, and the way that payments are calculated is different. Let’s take a look at how you would use an online lease vs buy calculator to better understand the differences.