Buying a car vs. leasing a car

[drycreek]

So I was thinking the other day about this. Now I drive an old Nissan Frontier that's long been paid off so in the next year or so I will probably be looking at getting another vehicle. The thing I'm trying to decide is wether it's better to lease or buy. I know everybody likes to make fun of people for leasing cars but from my limited knowledge on the subject it seems like it might be the best thing to do. I mean why buy a car when the thing depreciates as soon as you drive it off the lot. You pay for all the upkeep and maintenance and then in the latter years when you are still making the payments and the car is having bigger issues come up from time to time it can get really expensive for a pretty old vehicle. So why buy when you can lease for about the same price or less and then you don't have to deal with the major upkeep if anything goes wrong and you can trade in every couple of years for a new vehicle. As long as you don't go over the mileage limit you should be good, right? Am I missing something here?

 

[The Eyes of Texas]

As long as you're comfortable with always having a car payment, you can get more car for your money leasing. If you ever want to be free of payments, you would be stupid to lease.

 

[Not Shinola]

It really depends where you are in life. If you are looking to change cars every 3 years, leasing is a good option.

If there is a chance you will keep it while, go ahead and buy it.

If you are looking for the smartest for your money option, buy a used car.

 

[Smurfette]

I leased an acura a few years back for 400 a month, 48 months. That's 19200 dollars to leace the car. The car was 27K to start with. If I had financed the car, I could have paid 450 a month, and then been able to trade it in on a new car after so many months, and been able to make plenty of money to put a down payment on a new car.

As long as you're buying a car that's going to hold it's value reasonably well, there's no sense in leasing.

 

[KC-97HORN]

the advantage of leasing is having a new car every few years. And as you said, any issues or troubles are covered by the dealership.

However, when you buy the car, the warranty covers the same things for the same time.

If your job description requires you to have a nice car, its a great option for keeping up appearances without actually paying the real monthly payment on the car.

But the disadvantages to leasing are astronomical. YOU PAY THE DEPRECIATION, yep, thats right, almost every dollar of your payment goes towards the cars depreciation, so that when the dealership takes back the ownership of the vehicle, they can sell it for real value (which is probably 3-5 grand higher than what you paid out in payments) because you paid down the cost for them

If you want a newer car, I would strongly suggest looking for a corporate program car thats just come off either a 1 year or 2 year lease. The one year lease cars are very tough to find but they do exist, and if you get a relationship with a salesman, they can alert you anytime one of those returns to the dealer.

Those cars are basically new, still have the original warranty, and their payments are less than a lease payment of the same car new. The difference being, you actually have a chance to sell the vehicle in 2-3 with a some cash coming back to you (not that you would "make" money on it), but getting back $1-2000 after its all said and done is better than dropping the car off at the dealer with nothing to show for it. Or, if you decide you like the car, you pay it off and keep it.

If you hate the car on the lease, you are basically screwed, you have to keep it until your payments are done, or you can find someone else to take the car and payments off your hands.

 

[drycreek]

All good points. So it sounds like what an above poster said, it really just depends on where you are in life. Personally, I'm not a car person, I really don't care what my car looks like, I don't need it for bidness and I'm all about utility. In the past I've always held on to my Nissan pickups until they are about 10 years old. So it looks like I should probably continue to buy. The primary advantage of leasing is a new car and I really don't care about that so why not just keep buying a dependable Nissan pick up and riding it for a decade.

 

[TxStHorn]

I'm of the opinion that if it's paid for, save your money and drive it into the ground.

 

[Uncle Rico]

Lease/Buy is a classic fundamental of finance problem and unfortunately cheesedicks either didn't take this course or did very poorly in it since they make $30k per year but lease a new car for $400/mth.

All points made above are solid. If you like cars and like driving a new car and can afford to then leasing is solid. Best bang for your buck is to buy a used car and drive it till paid off. I personally have a 8 mile commute to work and don't care about what my car looks like so driving a paid off 2000 Camry is just fine for me. For all you dickfaces out there laughing at my car, it's got leather seats and a sunroof so suck it.

 

[Texas007]

Here is the key to the answer. When you go onto a lot nowdays do they want you to buy the car or lease the car? 8 out of 10 times they want you to lease it which should tell you all you need to know about who is getting the "better deal" in this transaction. There are other ways to figure it out as well, but the best way is do the opposite of what the stealer wants you to do.

 

[Victory Lap]

I personally wouldn't lease a car as I don't care much about cars, and unless you have clients that do care, you probably shouldn't lease.

It sounds like you've got a pretty decent model for buying/using cars with the 10 year pickup idea. And as the above poster put it, this is not what car dealerships want you to do. They want people to turn over cars every 3-4 years.

My old man's philosophy was always if you have a car paid for, and the repair bill per month is less than the cost of a new car, keep the old one. Once you're paying more than $3000 to $5000 or so on repairs per year, it's time to get a new car. $3000 / 12 = $250, or about what it would take to buy a new/used car with a few thousand dollars for a down payment. If you have a decently made car, it will take a while before $3000 worth of repair is needed. I'd say roughly 8-10 years or roughly 100k+ miles.

I'd also never buy a new car.

 

[MaduroUTMB]

Pay cash for a high-quality used car and ride that ************ 'til the wheels come off. Rinse and repeat.

 

[afat]

Or look for a Hail sale. We just bought a brand new Nissan Rogue for a Used price. We have to fix a bunch of dents, but we're not car people and folks can laugh all they want. It will be paid off in January.