Cars: Do you buy new or lease?

[mefordis]

What are your thoughts on leasing cars vs buying? We have been driving the same cars for 7-10 yrs, all paid off. However, it would be nice to have new cars. I was shocked to see how low the monthly payments are for a leased car.

Opinions on leasing vs buying?

 

[golfgal]

Leasing only makes sense if you get a new car every couple years and drive low miles. We usually buy a car that is about 2 years old although for as long as we keep our cars we could buy new.

 

[Christine]

I always buy because I keep my cars, like you, 7-10 years (or more). Plus, I put at least 20,000 miles per year on a car which makes leasing a bad (expensive) option for me.

While the monthly lease rates are low, be sure you read the fine print. Many leases requiring a down payment of $2,000 or more when you take possession of the car.

 

[Darcy03231]

We always buy because we drive them until the wheels are ready to fall off!

 

[Longsx3]

We always buy, leasing only makes sense if you use it for business and can write off the expenses or drive very few miles but want a new car every few yrs. Everyone I know who has leased has had to pay money when they turned the car when you add that into the payments it is almost as much as if you bought to begin with plus car insurance is typically higher when you lease.

 

[Tigger2252]

We always buy too. I'm pretty sure that I would go over the mileage, and with kids and dogs I know I would have to pay adjustments at the end for cleaning, etc. I once had an entire box of crayons melt on the carpet of the back seat because DD forgot them and I didn't see them.

 

[Acklander]

Another one who buys as it makes the most financial sense. I drive about 20K miles per year. I've had my current car for almost 6 years and it's still going strong. Usually I buy the car brand new for the better warranty. I'm really bad at mechanical stuff, so the longer the warranty, the better for me.

 

[Pigeon]

We buy reasonably priced, reliable cars, with the minimum of bells and whistles. Then we drive them for a very long time, typically 12-14 years at least.

 

[DisneyBamaFan]

We buy cars at about 1 year old, used. We pay about half the price for the car new, and we pay cash. We then drive the cars until they die, wash, rinse, repeat.

Our current cars are a 1997 minivan and a 2003 sedan. FYI - Warren Buffet also uses this approach.

 

[goofyernmost]

Neither...I buy an expensive car after it is about 3 years old. My last one was a 2005 Cadillac Deville. It had 27K on it, still had the bumper to bumper warranty on it, was in like new condition, hundreds of bells and whistles and the original owner took the $25000.00 hit for depreciation on it.

New $50K...I paid $23K. I usually keep a car a long time and since I am retiring in 4 more weeks the chances are I will be keeping this one for a while. It still only has about 58K miles on it. The point is, unless I wreak it or something, it will still give me some money back when I decide to move on to another one. That doesn't happen with a lease.

 

[Jason@dvcstore]

We typically buy a car that is 1 or 2 years old with 25,000 miles on it or less. I bought my 2004 Camry in December 2004 and still have it and it currently has 98,000 miles on it.

Jason

 

[scrapquitler]

What are your thoughts on leasing cars vs buying? We have been driving the same cars for 7-10 yrs, all paid off. However, it would be nice to have new cars. I was shocked to see how low the monthly payments are for a leased car.

Opinions on leasing vs buying?

We buy new and drive it until it has a minimum of 125K miles on it, then we buy a new one.

It seems to me that the low monthly payments are kind of a come on -- you can't drive very many miles without $ penalties.

 

[tar heel]

We're not candidates for leasing b/c we drive too many miles in a year, so we buy those leased cars after they're turned in with 25,000-35,000 miles on them!

 

[mefordis]

We buy cars at about 1 year old, used. We pay about half the price for the car new, and we pay cash. We then drive the cars until they die, wash, rinse, repeat.

Our current cars are a 1997 minivan and a 2003 sedan. FYI - Warren Buffet also uses this approach.

Do you buy from the dealership or directly from the owner?

 

[mefordis]

We're not candidates for leasing b/c we drive too many miles in a year, so we buy those leased cars after they're turned in with 25,000-35,000 miles on them!

How do you go about finding the leased cars, and do they have warranties?

Thanks!

 

[jenrose66]

From a long term financial standpoint leasing is a terrible choice. You start with lower payments but at the end of your term you have to return the car, so you have nothing to show for your investment, except for the enjoyment of a new car.

Also when you lease a car you may be required to carry higher levels of insurance for bodily injury liability. I've seen some lease agreements require you to carry levels of 100,000 per person 300,000 per accident. That's great coverage to have, but if you currently carry your state minimums that could get pricey.

 

[tar heel]

The leased cars are sitting on the dealership lot! I assume they are leased b/c of the age and how many miles.

Sometimes they have some factory warranty left, but we generally buy an extended warranty. If you choose to do the latter from a dealer, remember that the price they quote you is NOT a firm price and can be negotiated down -- sometimes a lot.

 

[prncess674]

How do you go about finding the leased cars, and do they have warranties?

Thanks!

Many dealerships sell them as CPO (Certified Pre Owned) They are normally well taken care of and driven very few miles. Last year I bought a beautiful 2008 BMW convertible with 10,000 miles on it. It still has 40K of the 50K bumper to bumper warranty left. It still practically had new car smell and I got it for nearly $17K less than had I bought it new.

I think it also helps to consider what kind of car you are looking to buy. If you just plan on buying a brand new Chevy Cavalier then go ahead. I wouldn't bother buying a Cavalier from lease return. Buying lease return is especially attractive on nicer high end cars. I am not just talking German, but 4 door sedans such as Camrys, Infiniti, Maxima are all good options.

 

[MrsPete]

As a general rule of thumb, leasing a car is a bad option for an individual. Yes, the per-month price is a little lower, but when your lease is up . . . you have NOTHING. If you buy -- whether you buy new or used -- hopefully your car will last a few years longer than the payments, but at the least you'll have a trade-in.

We've always kept our cars 'til they simply wouldn't go any more, and they tend to last about two years after I start saying, "It's going to go any day now". So that's two years of no car payments, two years of saving up for paying cash for the next car.

Leasing is a dressed-up, Newspeak word for renting. Do you really want to rent a car long-term?

As for how we buy our cars . . . we've done different things. My car, a Honda, we bought new three years ago. It made sense. The price difference between new and late-model-used was less than $1000. However, when we bought DH's truck last year, we saved about $6000 by buying a one-year old model. That also made sense. What will we do in the future? I don't know, but we'll investigate all our options first.

Also, we tend to "buy less car" than our similar-income, similar-age friends. We don't care to be heavily invested in something that can be lost in an instant, and we definitely want to be able to pay cash for whatever we buy.

 

[stevenpensacola]

www.carbuyingtips.com

incredible site.