Anyone go from always buying their cars to leasing?

[Frwinkley]

We have always bought new cars, pay them off within 3 years, and drive them until they have at least 110K. We are know considering leasing. The idea of having a new car every 3 years is appealing since you’d eliminate any costly repairs that come with maintaining an older car.

It is a bit foreign to us though, since you have nothing after you’ve made payments.

Any advice or experience?

 

[Happyinwonerland]

When you lease, you are essentially paying the depreciation during the lease term. At the end, you can finance it into a buyout for the remaining value of the loan. For instance, If you lease a $30000 car for $300/month for 3 years, at the end of the term you can buy it out for $26,400. So you don't have "nothing " at the end, you have a used car that you can choose to buy or turn in.

* My numbers are totally random, for demonstration's sake*

 

[Summer2018]

We have always bought new cars, pay them off within 3 years, and drive them until they have at least 110K. We are know considering leasing. The idea of having a new car every 3 years is appealing since you’d eliminate any costly repairs that come with maintaining an older car.

It is a bit foreign to us though, since you have nothing after you’ve made payments.

Any advice or experience?

I leased a VW Jetta in 2002, and I absolutely loved it. I ended up buying it because it was in mint condition with only 20,000 miles on it, which is the most expensive way to buy a car. It finally died last fall with 84,000 miles on it, just when I was handing it over to my daughter to drive. We put about $1500 into it to repair it, and it just kept having issues, so we sold it for exactly $1500 to a car mechanic.

Now that my daughter is in real need of a car, and I'm not crazy about the idea of it breaking down with her driving it, we plan to lease her a car in the summer.

All of our other cars, we have bought new or gently used from the get-go. We tend to put less than 8,000 miles a year on our vehicles even with driving the Ford Edge from CT to WDW every couple of years.

The key is keeping the mileage low and taking really good care of it so that you don't owe them any money at the end of your lease. Good luck.

 

[meghanb133]

I am 1yr 3mos into a 3 year lease term. The only downside I see is the car insurance rates seem to be slightly higher on a lease. I wish I would’ve checked that out prior.

I like the idea of knowing I will ALWAYS have a reliable car, I don’t have to spend money on costly repairs and I get bored easily so a new car every 3 years cures that I did get the 15k mile allotment to make sure I wouldn’t go over and my payments are still under $200!!

 

[BridgetBordeaux]

From a strictly financial standpoint, your buy it and keep it to 100k (110k) is the best money choice.
ClarkHoward.com has extensive resources devoted to car issues.
Leasing is a very expensive proposition and the mileage fees and wear/tear fees (at turn in time) can add up.

EDIT: here is one article from the website
https://clark.com/cars/leasing/buy-...bers-show-monthly-payments-in-both-scenarios/

 

[shoney]

If i could keep the miles under 12k I would lease again. Cheaper monthly payments and a new car every 3 years is perfect in my book.

 

[Ben E N]

I leased a VW Jetta in 2002, and I absolutely loved it. I ended up buying it because it was in mint condition with only 20,000 miles on it, which is the most expensive way to buy a car. It finally died last fall with 84,000 miles on it, just when I was handing it over to my daughter to drive. We put about $1500 into it to repair it, and it just kept having issues, so we sold it for exactly $1500 to a car mechanic.

Now that my daughter is in real need of a car, and I'm not crazy about the idea of it breaking down with her driving it, we plan to lease her a car in the summer.

All of our other cars, we have bought new or gently used from the get-go. We tend to put less than 8,000 miles a year on our vehicles even with driving the Ford Edge from CT to WDW every couple of years.

The key is keeping the mileage low and taking really good care of it so that you don't owe them any money at the end of your lease. Good luck.

Only 84,000 miles? Thanks for convincing me to never buy a Volkswagen. Our cars have 130,000 and 150,000 and are both still going strong. No car payments in the last 7 years.

 

[4kids4karen]

So, I work in insurance and we were discussing Volvo's leasing program in a team meeting. It's interesting to lease a car like a cell phone. My coworker researched it and the insurance is included through Liberty Mutual. I have never been inclined to get a Volvo, but interesting just the same.

Volvo is a 12 month lease and includes insurance.

Volvo wants you to pay for your car just like your smartphone

https://mashable.com/2017/09/22/volvo-xc40-lease-smartphone-plan/#yr6JjwsHsPqt

Care by Volvo
https://www.media.volvocars.com/us/...ll-be-as-hassle-free-as-having-a-mobile-phone

My current car is a Lease and I have absolutely no problem with my lease. I have many friend and relatives that only lease and get a new vehicle every three years.

 

[Klayfish]

If you have extra disposable income and always have to have a new car, then leasing may make sense. But financially, leasing a car and buying a brand new car are gigantic money burns.

The only car I'd consider leasing are German cars, only because they are such poor quality that you want no part of them once the warranty expires.

 

[4kids4karen]

I am 1yr 3mos into a 3 year lease term. The only downside I see is the car insurance rates seem to be slightly higher on a lease. I wish I would’ve checked that out prior.

I like the idea of knowing I will ALWAYS have a reliable car, I don’t have to spend money on costly repairs and I get bored easily so a new car every 3 years cures that I did get the 15k mile allotment to make sure I wouldn’t go over and my payments are still under $200!!

Insurance is not higher for a lease vehicle. I have people asking me that all the time and it is not true. What is true, is depending on the lease (and state), you may be required to carry higher liability limits. In Florida, Hyundai requires 100,000/300,000 for bodily injury and 50,000 for property damage. Of course any financed (loan or lease) needs comprehensive and collision. A lease can dictate you can not carry a high deductible. Some will say a deductible no higher than $500.

I would never recommend anyone carry lower than that even if they didn't lease. I have had several people tell me they leased a vehicle and need to get it insured, when I ask what the company liability limit requirement is, they get confused, because most of the sales folks do not disclose this up front. It IS in the paperwork the customer signs, IF they are paying attention.

You are not paying more for insurance for a leased vehicle. You might be paying more for higher liability limits, but you probably should have had higher liability limits anyways.

 

[scard192]

I prefer to buy and take a loan. When the loan is paid off, the amount/month that I was paying for the loan goes into my 401K.

 

[4kids4karen]

I leased a VW Jetta in 2002, and I absolutely loved it. I ended up buying it because it was in mint condition with only 20,000 miles on it, which is the most expensive way to buy a car. It finally died last fall with 84,000 miles on it, just when I was handing it over to my daughter to drive. We put about $1500 into it to repair it, and it just kept having issues, so we sold it for exactly $1500 to a car mechanic.

Now that my daughter is in real need of a car, and I'm not crazy about the idea of it breaking down with her driving it, we plan to lease her a car in the summer.

All of our other cars, we have bought new or gently used from the get-go. We tend to put less than 8,000 miles a year on our vehicles even with driving the Ford Edge from CT to WDW every couple of years.

The key is keeping the mileage low and taking really good care of it so that you don't owe them any money at the end of your lease. Good luck.

I am not sure I would put my kid into a leased vehicle as their primary vehicle. I have teens right now and when they are driving my leased vehicle with me in the car I am nervous. I prefer they drive their dad's car to practice driving over my lease. I have heard of people being charged extra for little scratches and such, so I am super cautious of tying to keep it in pristine condition.

Last year my son's truck died, so I helped him get a new truck. The dealership was trying to get me to co-sign, but there is no way I want to co-own a vehicle with at 23 year old (at the time). We had "sold" him his previous truck when he turned 18 to remove ourselves from any liability (he also moved out of the home into his own apartment). Instead, I gave a down payment to get him where the dealership needed him to be for him to get the vehicle in his name alone. He paid me back monthly for that down payment until it was paid off. I know on this board we talk about credit ratings, but to me, I am not willing to take on the liability risk and be named in any possible lawsuits.

 

[msmayor]

Actually, you COULD be paying more in insurance for a leased car...because you would want to have Gap Insurance. This is because if the car is totaled in an accident, you still owe for the car...the payments that are still due AND the residual value...because now there would be no car to turn in.

 

[Summer2018]

Only 84,000 miles? Thanks for convincing me to never buy a Volkswagen. Our cars have 130,000 and 150,000 and are both still going strong. No car payments in the last 7 years.

Yeah, it was so disappointing. Other than the usual oil changes, and tune-ups, I had zero repairs except for brake pads. Then all of a sudden, everything went wrong.

 

[Ben E N]

Yeah, it was so disappointing. Other than the usual oil changes, and tune-ups, I had zero repairs except for brake pads. Then all of a sudden, everything went wrong.

That's hitting our 2002 Escape right now, just 65000 miles after you. I feel like the kid from Old Yeller knowing that its time is just about up.

 

[shoney]

I prefer to buy and take a loan. When the loan is paid off, the amount/month that I was paying for the loan goes into my 401K.

And that is great if it works for u. Personally I would rather have lower monthly payment and a new car every 3 years. With the amount of mileage i put on the car now I can’t lease.

I think of a car as a monthly expense not an investment. Others think differently.

 

[NinaBella]

Actually, you COULD be paying more in insurance for a leased car...because you would want to have Gap Insurance. This is because if the car is totaled in an accident, you still owe for the car...the payments that are still due AND the residual value...because now there would be no car to turn in.

All leases include gap. That is in your lease payment, not insurance. Gap is a banking product.

 

[disneymagicgirl]

Last year my son's truck died, so I helped him get a new truck. The dealership was trying to get me to co-sign, but there is no way I want to co-own a vehicle with at 23 year old (at the time). We had "sold" him his previous truck when he turned 18 to remove ourselves from any liability (he also moved out of the home into his own apartment). Instead, I gave a down payment to get him where the dealership needed him to be for him to get the vehicle in his name alone. He paid me back monthly for that down payment until it was paid off. I know on this board we talk about credit ratings, but to me, I am not willing to take on the liability risk and be named in any possible lawsuits.

I'm glad you mentioned this. We are replacing DD18s car and I was thinking of financing just to build her some credit. I think I will pass on that and pay with cash and put it in her name.

 

[kymom99]

We have only ever bought 2 brand new cars. In 1997 we bought a brand new Camry. We actually had to wait for the car we wanted to be produced. The reason wasn't because they didn't have any to sell. It was because everything they had that we were interested in was part of their "lease program". I'm not even kidding when I tell you they would not sell us any of these cars. I think leases were fairly new. All these cars had aftermarket add ons. Sun roofs, spoilers, stereos, etc. they had to be making more off the leases because otherwise why would they care if we bought or leased?

 

[Klayfish]

Actually, you COULD be paying more in insurance for a leased car...because you would want to have Gap Insurance. This is because if the car is totaled in an accident, you still owe for the car...the payments that are still due AND the residual value...because now there would be no car to turn in.

As noted, most leases have gap coverage built in. But even with a purchase, you need/want gap coverage if you don't put a lot down because you owe for the car's value if it gets totaled.