Leasing vs. Buying. What is your side?

[SteveSRT8]

Originally Posted By: Nate1979
Leasing is a way to drive a car you really can't afford by only paying the depreciation during the term. However it has the highest cost in terms of fees and interest. I can't imagine it is ever a smart financial decision to lease.


I'm not sure there are absolutely no advantages, but I agree that I cannot see them either.

I can't imagine payments on a car forever. That seems wicked crazy. We keep our (VERY few) new purchases for ten years or more and there is still substantial equity in the vehicle at sale time.

I just sold my favorite Silverado for 10,900.00 that cost me 26k brand new in June 05. Very cost effective ownership and the truck made us a lot of money during its service here.

No leasing here...

 

[CharBaby]

I only recommend leasing for those:

*Who will always have a car payment(Not Me!) anyway!

*Like to be in a new vehicle every few years

*Can stay within the mileage limit

*Will be leasing again(as the damage/flaws, tire wear, over mileage etc., will affect you in the end) if you don't lease again.

*Want to change vehicles from brand to brand and often lower payments from one vehicle to another.

I have a friend that has been leasing her last 3 Chevy Cruze's(loaded) and each time, has lowered her payments from $129/mo, to $111/mo, to $99/mo. Same vehicle/newer model(I believe every 2 yrs)

Those I know who lease all the time are given Card Blonch with the dealership that they lease with. Often getting out of the leases early without penalty as long as they're leasing again.
And too, the paint flaws/blemishes and tire wear are mostly dismissed, as long as they're leasing another vehicle with the dealership.

But, I do know folks that have leased with the same dealership on several occasions and were treated well as long as they were leasing or buying.

But[BUT], once these folks stopped leasing/buying, and just wanted to turn in their vehicle without another transaction, these folks were hit with every charge under the sun. Even when the vehicle was turned in on time.

With the exception of the early termination fee(unless it applied), they were charged for every ding/scratch, worn tire, over mileage etc. Whatever the salesperson or appraiser could find!

 

[demarpaint]

Buy for me. I'd rather have something to show for after making payments for 3 years. I'd rather not leave the lot without something to drive, or start the payment cycle over again from day one. I also don't like the idea of being restricted with a 25 cent/mile fee if I go over the miles allotted in the lease agreement.

I handled lease returns for a few months at a Honda dealer. It was amazing how many people parked their cars months before the lease was up because they went over the mileage and didn't want to get banged for a quarter a mile to drive. Then there were the people who wanted to get out early, or buy their lease only to find they'd get a better deal buying the same car they had off the used car lot because it was cheaper than what buying their lease would cost.

I have a friend who trades in his car every three years. He works it so he has a $350/month payment. If he's under 36K miles his trade is worth more, if he's over 36K miles he gets a bit less but he isn't beat up for 25 cents a mile in penalty miles. He's been doing that for many years now. He trades his cars is before it needs brakes, shocks, tires, etc.

 

[Pop_Rivit]

Leasing a vehicle is a financially stupid decision for the majority of people. The very idea of making payments on a depreciating asset and then giving it away at the end of the lease with absolutely nothing to show for the years of payments is simply stupid.

Or worse yet, actually buying the vehicle at the end of the lease and continuing to make payments for another 4 or 5 years on what is nothing more than a used car.

Originally Posted By: lawman1909

The way I see it, say your payment is $300 a month, so over 36 months that is $10,800. Which is.. $3,600 a year. Compared to buying and getting a loan, in the long run, if the vehicle is $30,000, and is financed for 72 months, say a low interest rate, that's about $36,000. Sometimes you can get the 0% APR financing which is great however.


You've fallen into the same trap as so many other people have. It makes more financial sense to purchase a vehicle you can afford with cash up front, and then make those years of payments to yourself. Put those payments into an account that will earn some interest, and then when you need repairs or it's time for a new(er) vehicle you'll be in the position of a cash buyer. There is a freedom in not being a debt slave that, sadly, many people will never know.

It doesn't give you the self esteem crutch of showing off in a shiny new car every couple of years, and it does take some self-discipline. And if a growing bank account and investment portfolio isn't important to you, and you prefer to merely pretend to be wealthy rather than actually being wealthy, then by all means continue to lease or make debt payments.

 

[MCompact]

As I've hear it put, car leases are the "payday loans" of the middle class...

 

[sciphi]

It might make sense for older folks who stay at home a lot, or if there's a tax advantage to be had for a company/proprietorship. Then the cost of downtime is minimized by having a new-ish vehicle, and older folks on fixed incomes have a predictable monthly vehicle bill instead of getting hit with a $500 repair bill this month and another $400 three months later.

Leasing isn't my cup of tea, but I like keeping cars I like until it doesn't make sense anymore.

 

[itguy08]

I drive way too much to consider leasing.

I bought the Taurus a few days before Christmas in 2009. Now has 82k on it and on track to be 83k by December - that's 16,600 miles per year.

Maybe with the truck, but I'm on track for over 10k on that this year as well.

I do like the "idea" of a new car every 3 years but you pay dearly for that privilege. However, I like to buy low, pay off early (paid the Taurus off in 4 years, plan to do the truck way early too) and then if I want a new car go for it.

 

[CBR.worm]

We leased a car once, there is definitely some appeal in a long term rental where you give the car back at the end of the term. If you want to have a new car every few years and don't drive a lot, it is possible to get a decent deal on cars that don't depreciate tremendously - or at least a deal comparable to buying a new car and then trading it in after two to three years.

If that doesn't match your usage profile a lease probably isn't ideal.

We tried it about 15 years ago and most likely won't do it again.

 

[Quattro Pete]

Originally Posted By: lawman1909
Nope, they do not. At least every lease I have had. Always turned it in with 2/32 or 1/32 left.

You got lucky.

Quote:
Replace the tires early: Dennis Rayfield, formerly a fleet manager and currently an Edmunds Live Advice manager, says he advised his clients to buy new tires after the second year in a three-year lease. Then there would be no chance the manufacturer would charge them for excessive tire wear. Plus they would get some of the benefit of driving on new tires.

http://www.edmunds.com/car-leasing/how-to-return-your-leased-car.html

 

[lawman1909]

With her case, yeah it sounds bad. With all my cases, adding up EVERY penny I spent, I saved a few hundred to a thousand dollars by leasing, then buying with cash.

 

[lawman1909]

On my lease now, I am allotted 36k miles/3 years. I assume ill be at about 45-50k by the end, but this car will be bought so there are no extra mile charges. Plus I actually save a few hundred bucks by leasing then buying with cash rather than straight up buying it.

 

[lawman1909]

Actually, not at all. I have enough money to buy my vehicle (26k) but with leasing and then buying, I actually end up saving a few hundred bucks. Its a good deal if you find a good price.

 

[Quattro Pete]

Originally Posted By: lawman1909
With all my cases, adding up EVERY penny I spent, I saved a few hundred to a thousand dollars by leasing, then buying with cash.

I'd be interested in seeing your full math on this.

 

[Jim K]

The last 2 cars I paid off outright after my paid off trade in. I`ve been buying new about every 4/12 to 5 years. Here is my latest car deal. Paid off 09 Scion XB trade in was 10,200 on a 14 Corolla left a balance of 9k which I paid off at trade . That comes up to 150 a month for 60 months if I was making a payment.I have a new car and no payments and no interest . I just save a enough so that when the new car urge hits I pay it off after the trade in. I buy economy cars that hold up and hold their value so that helps.

 

[SwampSurvivor]

Originally Posted By: Jimkobb
The last 2 cars I paid off outright after my paid off trade in. I`ve been buying new about every 4/12 to 5 years. Here is my latest car deal. Paid off 09 Scion XB trade in was 10,200 on a 14 Corolla left a balance of 9k which I paid off at trade . That comes up to 150 a month for 60 months if I was making a payment.I have a new car and no payments and no interest . I just save a enough so that when the new car urge hits I pay it off after the trade in. I buy economy cars that hold up and hold their value so that helps.


The economy cars, while not worth much to begin with, will never lose as much as a higher end car; my $14k focus simply cannot depreciateas much as a $50k Lexus is the first year.

 

[lawman1909]

My current car lease is as follows
$290 a month.
$0 put down.
lease is 36 months
$290 x 36 = $10,440
Residual after 3 years = $15,120.
Total is $25,560
MSRP on my vehicle with the 3 extra conveniences such as front hood protector, etc. I purchased = $26,991.32
Total savings is $1,431.32
Just alone on this, with going at the end of the month was what saved me the money I saved. This was also right as the 2015's were rolling out so this dealership was pushing these away.
I went to 3 other dealers, and not one came w/in $400 of my stealership total amount at the end including the residual.

 

[Quattro Pete]

Originally Posted By: lawman1909
This was also right as the 2015's were rolling out so this dealership was pushing these away.

That means you could have purchased one outright for significantly below MSRP as well.

 

[Mr Nice]

Leasing is only for affluent folks, not the average Joe.

I buy and keep for minimum 10 years / 200K miles.

 

[RhondaHonda]

My FIL would lease a new luxury sedan and pay the entire lease up front so there's no interest figured. At the end of the lease he could see what the car was worth at the time and decide if he would like to purchase for the residual or turn it in. There were some great deals and it was basically no risk for him. I bought one at the end of the lease from him for $8k less than they were selling for. If you're smart about it, they can be advantageous.

 

[Lolvoguy]

Originally Posted By: LT4 Vette
Leasing is only for affluent folks, not the average Joe.


No, to become affluent they wouldn't waste their money like that

I'd only chose that route if I had a business that required I had a newer /very reliable vehicle that was used a lot or if I had a job that covered my costs.

I have just paid off my 07 Focus and have a measly 6k in total debt. It's kinda nice not knowing what to apply my money to when those payments are done next spring

As a lessee, you'll never experience this feeling