Lease or Buy -- WWYD?

[JWigs]

Personally, buying is a better option as you own the car outright. I used to work at dealerships and I can tell you leasing only works if you are someone who wants to not deal with an older car and/or like having new cars. Or you want to lease a nicer car and you don't see yourself driving a lot or wanting to change anything about the car.

Leasing always seems like it's for someone who wants to always have a newer car or a higher end car where it would make sense. Otherwise, you end up paying more after the lease is up to 'buy' the car outright. Or else return the car and not have anything to show for the $ you already paid.

 

[kathy884]

How long do you usually keep your cars? I tend to keep mine for 10 years or 200,000 miles. (E.g. my last car I kept 12 years and I had 180,000 mile on it. I bought a one year SUV in 2014 from Enterprise Car Sales that I will probably keep till 2024.) If you fall into this category buying makes the most sense. If you just look at a car as reliable transportation, buying a car and keeping it for a long time is usually the most economical way to go. // Most people I know who lease drive cars for work, take clients around, keep a car for two or three years, and want to have a relatively new car all the time for the impression for clients, etc. I've never done the math, as that's not me at all, but I understand that leasing is a great option for this kind of situation.

 

[tvguy]

About three years ago I got into a car accident and totaled my car. We ended up leasing a new Honda CR-V from a friend of a friend. Our lease is coming up and for various reasons we didn't put a lot of mileage on our car. This now means that we can either lease a new car for $279 per month (about $20 cheaper per month than our current lease) for 39 months, no money down, OR we can finance the buy out of the remainder of the lease for $325 per month for 60 months. The total payments for the life of the lease would be about $11K. The total payments for the life of the car loan would be about $19,500. So the loan would cost us about $8500 more. I asked our dealer friend what the expected trade-in value of the car would be at the end of the loan term and he said he couldn't really predict, but that if we bought a CR-V about 8 years ago and were trading it in today it would be worth about $8K. So economically it seems to be a break-even proposition.

Thoughts on what the better route is? Lease or buy? To me, this is entirely an economic decision -- I don't care about features, keeping up with the Joneses, etc.

One other point. I don't see myself driving our existing car much past the 8 year mark -- our last car starting to suck up repair costs at around year 9 or 10 and also started to feel a lot less safe.

$19,500 seems like a lot of money for a 3 year old CRV.

 

[tvguy]

I haven't owned a car in 25 years. Leasing works for me. I always have a new car. I never spend any money on maintenance and the payments are lower than owning. Here's my logic (it may be stupid, I don't really know or care) -- say I own my car and want to sell it and buy another. I never really have anything because I will always need a car and I will always use the money I get for selling a car to buy another. Yes, I own the car, but whatever money I get back from it will always be used to buy another car. In addition, I would never want to own a car long enough to pay off the loan so I would always have a car payment anyway.

In all these years, I have never been charged for any wear and tear to a leased car. The majority of my friends also lease their vehicles.

My two cents.

I guess we're opposites. My family car will be 29 years old this year. Financed it for 3 years, so it has been paid off for 26 years. That's 312 monthly payments I haven't had to make. Repair costs average $750 a year, or about 2 months lease payment. Insurance and registration are lower. Didn't spend a penny in 2013 or 2014 on repairs, last year I spent $1,900 on a new transmission. That seems to be the pattern.

 

[mefordis]

About three years ago I got into a car accident and totaled my car. We ended up leasing a new Honda CR-V from a friend of a friend. Our lease is coming up and for various reasons we didn't put a lot of mileage on our car. This now means that we can either lease a new car for $279 per month (about $20 cheaper per month than our current lease) for 39 months, no money down, OR we can finance the buy out of the remainder of the lease for $325 per month for 60 months. The total payments for the life of the lease would be about $11K. The total payments for the life of the car loan would be about $19,500. So the loan would cost us about $8500 more. I asked our dealer friend what the expected trade-in value of the car would be at the end of the loan term and he said he couldn't really predict, but that if we bought a CR-V about 8 years ago and were trading it in today it would be worth about $8K. So economically it seems to be a break-even proposition.

Thoughts on what the better route is? Lease or buy? To me, this is entirely an economic decision -- I don't care about features, keeping up with the Joneses, etc.

One other point. I don't see myself driving our existing car much past the 8 year mark -- our last car starting to suck up repair costs at around year 9 or 10 and also started to feel a lot less safe.

We buy our cars and drive them until the wheels fall off.

 

[SandyinMonterey]

I would never lease a car. My father raised me on that "logic." And my husband feels the same way. At the end of the day and all that money, you don't own anything.

 

[Judique]

I have a 7 year old Jeep. Nothing wrong with it, other than some cosmetic scratches and bruises.

I would LOVE to have a new one! But common sense tells me not to waste my cash on the luxury of shiny and new. I have nobody I need to impress work wise - it gets me there and back just fine.

Every time I have done the homework on leases they were more costly than keeping my car for 10 years or so.

I think that for me, 10 years is my limit for keeping a vehicle. At that point I want some updates, kind of like I want a new kitchen even if everything still works.

 

[antmaril]

I guess we're opposites. My family car will be 29 years old this year. Financed it for 3 years, so it has been paid off for 26 years. That's 312 monthly payments I haven't had to make. Repair costs average $750 a year, or about 2 months lease payment. Insurance and registration are lower. Didn't spend a penny in 2013 or 2014 on repairs, last year I spent $1,900 on a new transmission. That seems to be the pattern.

Yes, we are definitely opposites. I don't want my car to be more than three years old - EVER. When my husband was alive, he always drove an older car. He worked from home, so he didn't put too many miles on a car. I drove into the city and always wanted a reliable car (obviously, anything can happen, but you know what I mean).

Now I am widowed and retired and still want a new car every two or three years. I could buy a car for cash, but that doesn't interest me at all. Leasing works for me. Like I said in my earlier post, I only have a couple of friends who own their cars. Almost all of the people I know lease their cars. The ones who own, drive to Florida or Arizona for the winter every year. Obviously, they would put on too many miles for a lease.

Different strokes...

 

[mjkacmom]

I bought my last new vehicle 13 years ago. All of our others were purchased used, cash, so I haven't had a car payment in decades. We buy Hondas or Toyotas, and drive them to the ground, from our driveway to the junkyard. Ds17 is driving a 15 year old Honda, with a refurbished transmission we put in over the summer.

 

[tvguy]

Yes, we are definitely opposites. I don't want my car to be more than three years old - EVER. When my husband was alive, he always drove an older car. He worked from home, so he didn't put too many miles on a car. I drove into the city and always wanted a reliable car (obviously, anything can happen, but you know what I mean).

Now I am widowed and retired and still want a new car every two or three years. I could buy a car for cash, but that doesn't interest me at all. Leasing works for me. Like I said in my earlier post, I only have a couple of friends who own their cars. Almost all of the people I know lease their cars. The ones who own, drive to Florida or Arizona for the winter every year. Obviously, they would put on too many miles for a lease.

Different strokes...

I get that, but I can't recall a single repair on any car I have owned that was needed before they were 10 years old.
I come by it naturally, my mom's car was 7 years old when she was widowed. My dad was terminally ill and very seriously consider buying a new car before he passed away, but her car was just in too good a shape.
She kept it another 7 years. The next car she only had 2 years, a Buick lemon. Her 1976 Ford lasted her 27 years, and only broke down once in all that time (fuel pump) Her last car was 10 years old when she passed away, she drove it regular until the last year of her life. But my mom, as a child of the depression, cared most about cost.

 

[antmaril]

I hear 'ya, but I am almost 65 years old and I have never in my adult life ever driven a car that was more than three years old. I dont know what to tell you. I like a new car. I admit it.

 

[tvguy]

I hear 'ya, but I am almost 65 years old and I have never in my adult life ever driven a car that was more than three years old. I dont know what to tell you. I like a new car. I admit it.

My neighbor across the street was like that. I was giving him a hard time once....telling him "you know, you can get new tires without a whole new car attached to them". A week later he came over and said. "I was thinking about what you said about tires, I can't recall buying tires in 30 years".
He has since decided to hang onto his cars, I think his Lexus is 10 years old now, and his Toyota is 8. He used to have great luck negotiating prices on new ones....low enough that he could sell them 3 years later for what he paid. Used car prices have fallen a lot so he is hanging on to his cars.

 

[Judique]

I hear 'ya, but I am almost 65 years old and I have never in my adult life ever driven a car that was more than three years old. I dont know what to tell you. I like a new car. I admit it.

I think it's okay to like things new. Spend your disposable cash on what makes you happy!

 

[GaSleepingBeautyFan]

We buy our vehicles. But then we drive them until they are about ready to drop. We still own and drive a 2006 Honda Accord. Plus my 2008 Toyota Highlander and my husbands 2013 Honda CRV.

All 3 will last an extremely long time if taken care of.

We have a friend who preferred to lease cars - he'd get a new one every 3 or 4 years. Then he lost his job and a year later hasn't found a new full time one. So here he is struggling to make lease payments when if he'd just bought the vehicle new 3 years ago, he'd have had it paid off and that would have been one less bill he is trying to pay.
He said if he ever gets a full time job again, he'll be buying the car instead of leasing.

 

[crisi]

I think it's okay to like things new. Spend your disposable cash on what makes you happy!

And those of us who buy used late model cars will thank you.

 

[Judique]

And those of us who buy used late model cars will thank you.

I like them to be about a year to 18 months with some warranty left.

 

[xlxo]

Leasing is another word for renting..... another vote to buy/finance.

Leasing only makes sense for business or you are the type of person who wants a new car every few years.

 

[Gracie09]

We leased our last car because we were going from a traverse to a Prius and I was apprehensive about a drastic change. It's good we did because two years into it I hate the Prius. I feel like I'm driving a roller skate. It's loud. I don't find it very comfortable. It's hard to get my kids in and out of their booster seats (they can't get the latch at the right angle to belt in on their own). We have one year left and then we are looking at a new crossover for me. I've already started looking. Dh may actually take the Prius since his trailblazer is started to get to the point that repairs are more expensive than it's worth.

 

[smiths02]

I grew up believing you should only buy.
Yet 2 years ago I scoured research & came up with about the same answer as you--it is pretty much a wash anymore. (remember you can make a lease your own based on money down--or not--length of lease, maximum yearly miles, etc.)
The advantage to leasing is that it is new & will probably have few mechanical issues.
The advantage to buying (in your case) is that the Insurance will likely be a bit less.
But that pretty much puts it at a break even again...
Our teens have cars that are around 15 years old. We are starting to put some serious upkeep $ into them...and honestly wish we had not put the $3500 over 2 months we put into a '99 Nissan Altima. We could have leased a new vehicle for $99/month (no money down). Yes, with upkeep over the next few years, again I think it would be close to a break even.
Everything I researched about leasing v. buying (and researching is my job...), basically it said if things are a break even leasing is the better deal.

The only thing I have to say is that risk is not taken into account. If I pay on a car for 5 years, the car is then mine. If I lease a car for a few years and then find that I have income loss (job loss, death of a spouse, what have you)...then I don't have a vehicle at all.

We don't lease or buy new cars...we buy gently used cars and drive them to the ground. This still makes the most financial sense.

 

[Yarbogash]

I grew up believing you should only buy.
Yet 2 years ago I scoured research & came up with about the same answer as you--it is pretty much a wash anymore. (remember you can make a lease your own based on money down--or not--length of lease, maximum yearly miles, etc.)
The advantage to leasing is that it is new & will probably have few mechanical issues.
The advantage to buying (in your case) is that the Insurance will likely be a bit less.
But that pretty much puts it at a break even again...
Our teens have cars that are around 15 years old. We are starting to put some serious upkeep $ into them...and honestly wish we had not put the $3500 over 2 months we put into a '99 Nissan Altima. We could have leased a new vehicle for $99/month (no money down). Yes, with upkeep over the next few years, again I think it would be close to a break even.
Everything I researched about leasing v. buying (and researching is my job...), basically it said if things are a break even leasing is the better deal.

Well said.

People generally have completely the wrong view on leasing. From a dollars and cents perspective the net costs are about the same. The main difference is when you pay. Buyers too often get hung up on the circumstances of leasing vs buying and should instead just do the math, look at how much each option costs in total (including buyout, interest, earnings from money you hold or deferred earnings, etc) and go from there.

Barring other concerns if a dealer is offering better terms for leasing vs buying or vice versa that should settle it right there.