Buying vs. leasing a new car

[Bob NC]

Leasing is really only a great alternative if you meet ALL of these conditions.

1) You have resigned yourself to the fact that you will ALWAYS have a car payment.

2) You want a new car every few years no matter what.

3) You drive less than 15,000 miles a year.

 

[redrosesix]

How long was the lease and for how long was the financing after the lease period was over? How did the payments compare between the two periods?


What type of deal do you usually end up getting to buy at the end?

It was a four year lease at 0.1 percent financing -- the payout took another 4 years, also at 0.1 percent and the payments were the same. That said, 15 percent of each of our payments was sales tax.

At the time I originally leased my car, it was 4.5 percent interest on purchase payments. And I would have had to pay $3k in sales tax up front. My brother bought a vehicle shortly after I leased mine -- he paid all that tax and then ended up selling the minivan to buy a truck 3 years later.

 

[disneysteve]

Im not llooking for a new vehicle now, but am thinking about two yrs down the road. I am thinking with leasing because you dont need as much of a down payment, and monthly payments are lower(i dont earn alot so this would help me).Also, dont you have to have a better credit rating to lease vs. buy? My credsit is pretty bad right now, but in two years or so it should be much better.

Keep in mind that leasing is the most expensive way to get a car. If your goal is to save money because you don't earn a lot, leasing a brand new car is the worst possible choice. Buying a brand new car is probably the 2nd worst.

Follow the standard rule of thumb: Pay cash if possible. If not, your payment should not exceed 10% of your monthly take home pay for no longer than 36 months. Sit down and figure out what that would get you, taking into account any down payment or trade value. Then find yourself a nice used car in that price range.

 

[*Seanaci*]

DH and I will be buying a newer used car. My car (98 ford contour) has loads of repairs that need to be done...and the cost of repairs would be the same as making a car payment once a month over the next 6 months. And that's provided the car lasts that long doing one repair a month. Luckily we paid off Hubby Tribute back in April. Leasing is not an option for us as DH will.drive the new car and I'll drive the tribute. And he commutes 60 miles a day round trip for work.

Leasing is a good idea for some...but not for everyone.

Just remember, when you're ready to go get that new car, do your homework online ahead of time. There are lots of good sites that can help you save money if you go in with that knowledge of the savings ahead of time and ask the sales rep helping you.