Thoughts on leasing vs. buying a car

[jkl]

I am currently driving a 2000 RAV4 with 152,000 miles. I realize that my time is nearly up with this car so am looking to replace it. I am blissfully retired so I won't have to worry too much about going over the mileage limitations. What are everyone's thoughts about the idea of leasing vs buying a new car? Thanks!

 

[AxelAnnie]

There is so much depreciation when you buy a car. A good deal can be had on the 2016 when the new. Models come out.

I love to get new cars.... Often. . Leasing fits for me. . If you are retired you might want to look at leasing. . My friend just leased on a two year lease a Buick crossover for 150.00 per month. . I am always on the high side of miles; so i buy them going in... And then it doesn't cost much. . Not like the old days. . . .

Your accountant will have the best opinion though!

 

[Prancer]

Lease if you want a new car every few years. Buy if you intend to hang on to it.

 

[GarrAargHrumph]

I tend to keep my cars forever (I've only ever owned three), so I buy. I like having years and years without a car payment, and if you buy a Honda or other very reliable car, you also don't have much in terms of repair bills. Or when you do, you know the car will continue on for 250,000 miles beyond that repair, so it's worth it.

My dad is retired. He buys his cars in cash so he doesn't have a payment, and then keeps them for 20 years. He's not rich, either - but he's very good at saving up for stuff.

The "keep it forever" thing works well if you're like me and my dad - you don't so much care if your car is sexy or good looking or, in my case, of faded paint and the occasional rust spot. But if that stuff bothers you, perhaps my method is not so good.

 

[Oreo]

I tend to keep my cars forever (I've only ever owned three), so I buy. I like having years and years without a car payment, and if you buy a Honda or other very reliable car, you also don't have much in terms of repair bills. Or when you do, you know the car will continue on for 250,000 miles beyond that repair, so it's worth it.

My dad is retired. He buys his cars in cash so he doesn't have a payment, and then keeps them for 20 years. He's not rich, either - but he's very good at saving up for stuff.

The "keep it forever" thing works well if you're like me and my dad - you don't so much care if your car is sexy or good looking or, in my case, of faded paint and the occasional rust spot. But if that stuff bothers you, perhaps my method is not so good.

I'm the the same way, I paid cash for my new Miata in 1991, and I'm still driving it 240,000 miles later. I keep maintenance and repairs up to date, park it in a garage, and rent cars if I drive on a long trip. 25 years of no car payments certainly affords a lot of other more memorable indulgences.

 

[Deleted member 1204]

Definitely lease. I hate car payments so I always used to buy my cars with cash and hold on to them for ten years or so. However, I find that today's cars are so high-tech that once they are out of warranty, the cost of repairs becomes almost prohibitive and it defeats the purpose of hanging on to them for long. You can avoid the whole problem by leasing, especially if you are the kind of person who keeps the mileage low.

 

[Spun Silver]

Definitely lease. I hate car payments so I always used to buy my cars with cash and hold on to them for ten years or so. However, I find that today's cars are so high-tech that once they are out of warranty, the cost of repairs becomes almost prohibitive and it defeats the purpose of hanging on to them for long. You can avoid the whole problem by leasing, especially if you are the kind of person who keeps the mileage low.

That's why I am considering leasing for the first time. We have a 2007 Honda Civic but it costs us at least $500 a year for repairs and maintenance, and pretty much has since we got it (after warranty). I hate that car. At least with a lease, if I hate the car I can change it.

 

[victorskid]

For the past 15 or more years I have opted to lease, on a low mileage option, and to change my car about every 3 years. It provides me the ability to always have a car that is under warranty and to budget my lease payments into a fairly fixed income.

 

[Lizziebeth]

The only thing I did not like about leasing is that the company expected to get the car back in showroom condition. They did not seem to understand that I actually drove the car so it might show a little wear! I took good care of it but boy were they picky and they wanted to charge me to fix stuff.

Generally I am a "buy a car and drive it for many years" kind of person. I pay off the car and keep driving it. By the time I have need of a new one, I will have saved for it so the loan amount is smaller and gets paid off sooner.

 

[GarrAargHrumph]

That's why I am considering leasing for the first time. We have a 2007 Honda Civic but it costs us at least $500 a year for repairs and maintenance, and pretty much has since we got it (after warranty). I hate that car. At least with a lease, if I hate the car I can change it.

$500/year for repairs versus maybe $300/month for a lease, though...?

Perhaps an idea is to lease the new car, and if you do like it, to consider buying the lease out? I'm not sure if that's economical or not, having never leased a car before.

 

[Spun Silver]

$500/year for repairs versus maybe $300/month for a lease, though...?

Perhaps an idea is to lease the new car, and if you do like it, to consider buying the lease out? I'm not sure if that's economical or not, having never leased a car before.

$500 a year after buying the car! If I prorate the purchase price over 10 years and add in the repairs it's over $2K/year. Whereas leasing a car for $150/mo. comes to $1800/year. I realize there are other variables, like rising lease rates over the years and the details of leases. That is where I am blank, never having leased before. I have a gut feeling that lease-to-buy would not get the best price but it wouldnt hurt to ask!

 

[Spun Silver]

The only thing I did not like about leasing is that the company expected to get the car back in showroom condition. They did not seem to understand that I actually drove the car so it might show a little wear! I took good care of it but boy were they picky and they wanted to charge me to fix stuff.

That is a good argument against leasing. I thought the whole beauty of it was that we wouldnt have to worry about maintenance. Showroom condition is not likely with us, sad to say.

 

[agalisgv]

Whereas leasing a car for $150/mo. comes to $1800/year. I realize there are other variables, like rising lease rates over the years and the details of leases. That is where I am blank, never having leased before.

$150/month isn't typical for a lease--usually it's quite a bit more than that. Also, you have to maintain the car during that time, so you still have maintenance costs. I think it more comes down to whether a person wants to drive newer cars, continually.

 

[MacMadame]

Another reason to lease is if you are in a position to write-off the lease payment as an expense on your taxes. This is why businesses will often lease the company cars instead of buying them and some self-employed people who use the car on the job will lease as well.

 

[Spun Silver]

$150/month isn't typical for a lease--usually it's quite a bit more than that. Also, you have to maintain the car during that time, so you still have maintenance costs. I think it more comes down to whether a person wants to drive newer cars, continually.

Oh. Shoot! That settles it, then. I have seen many ads for $150/mo. (Food Network, hubby's favorite, is wall to wall car commercials) but I thought leases included maintenance. We are indifferent to appearance so I guess we will be buying again when this one is decrepit. Thanks for that info!

 

[GarrAargHrumph]

You might buy a recent used car, as a way to have a car that's got a lower payment (sort of like a lease) and yet one you can beat the heck out of.

Yeah - with a lease, you still have to pay for maintenance, you have to keep the car pristine, and you need to keep the mileage low. It's not for the faint of heart.

 

[Spun Silver]

^ Oh, we will pay cash. We refuse to pay a penny of interest. I guess now we could have a whole convo about buying used vs. new. I am very skeptical of used. I am already dealing with invisible plumbing problems and would be loath to take on possible invisible car problems. We are both a used car salesman's dream - totally ignorant.

@jkl, I am very sorry for hijacking your thread. I will bow out now. Hope you get the answers you need.

 

[mysticchic]

I love leasing!! I have a Ford Escape and I pay 150.00 a month. It's a 2 year lease and everything is cover except oil changes. The only thing bad is a higher insurance rates. You have to have full coverage.
I know GM car leases have full replacement built in so you can forgo that with the insurance.
My lease payments have gone down over the years. Most offer owner loyalty incentives. My last lease was 235 a month. About 6 months before my lease was up, I got a letter from Ford. They offered me an opt out for free. The car was a 2014 and this was last year. I only had 10k miles on it. Basically, they told me to name my price on a new one. I told them I wanted to only pay 150 a month and I didn't want to sit in the dealers office for more than an hour.
A salesman called me, I went online and picked out the one I wanted. They called me the next day to come in and pick up the car. I was in and out in an hour!

 

[AxelAnnie]

You might buy a recent used car, as a way to have a car that's got a lower payment (sort of like a lease) and yet one you can beat the heck out of.

Yeah - with a lease, you still have to pay for maintenance, you have to keep the car pristine, and you need to keep the mileage low. It's not for the faint of heart.

I paid a bit more per month and the maintenance is covered... Thank goodness. . I have not had a problem with the car but regular maintenance could give you a stroke

 

[Deleted member 1204]

Maintenance is covered in my lease as well.

 

[Lutzcy]

Suze Orman hates leasing and highly recommends buying (if you are into her advice). If you purchase a Toyota or Honda, they will go hundreds of thousands of miles. I purchased a 2013 Corolla in October 2016. My buying experience at Carmax was exemplary. I would go back to Carmax.

 

[Rogue]

Here's a quick and dirty calculator that might help in the decision making.
http://www.marketwatch.com/tools/carleaseorbuy

 

[Deleted member 1204]

Suze Orman hates leasing and highly recommends buying (if you are into her advice).

I wouldn't take Suze Orman's advice in general.

 

[PDilemma]

Be sure to consider how much mileage you are likely to put on a vehicle in a year. My idiot sister-in-law leased for awhile and went way over mileage limits every single year then had to pay a ton of extra money. Leases always have mileage limits and fees per mile if you are over.

 

[Lizziebeth]

Be sure to consider how much mileage you are likely to put on a vehicle in a year. My idiot sister-in-law leased for awhile and went way over mileage limits every single year then had to pay a ton of extra money. Leases always have mileage limits and fees per mile if you are over.

That is a very good point. Extra mileage is expensive.

 

[BigB08822]

I wouldn't take Suze Orman's advice in general.

Orman gives a lot of good advice but she also gives a lot of advice as if it is 100% right for 100% of the population and that just isn't how it works. Everyone's financial situation is different and everyone wants different things out of life. She tends to give advice that is fine if your values align perfectly with hers. IMO.

 

[madm]

Toyotas are excellent cars and should last well over 200K miles. I would not consider your car really old. In fact, we have owned Toyotas as long as 30 years. My current car is a BMW 528i that has 247K miles on the first engine and is still running perfectly. If you like to own cars for a long time, then buy the car and don't lease. Re: buying a used car, you can definitely find certified pre-owned ones with <50K miles for a decent price. The advantage of buying a certified pre-owned car is that you get a one-year bumper to bumper factory warranty on everything, and an extended powertrain warranty. I just helped my niece buy a certified 2011 RAV4 with 52K miles for $15.5K, and I bet that car will last her at least 10 years. If you shop for a privately owned vehicle, be sure to get it inspected by a mechanic (e.g. the dealership) before you buy.

 

[Moto Guzzi]

^^ The people at the garage that does maintenance on my Camry agree that Toyotas are excellent cars. I bought mine in September 2001 and it has 156,000 miles on it. They told me I should get at least 200,000 miles. I bought it new.

The month before I had looked at the 2000 models and thought I could get a good deal because I knew they were coming out with a new design the next month. Also, Toyota had certificates on their website offering an additional $1,000 off. The sales manager of the dealership I originally went to was a complete jerk. He insulted me and treated me like an idiot and claimed there were no discount certificates even though I had printed out the info. He laughed at what I said was a fair price. I got up and walked out.

One of our division heads at work heard I was looking for a car. His friend owns a Toyota dealership so he called him and asked him to give me a good deal. I bought the newer model with more upgrades for about $3,000 less than the price the sales manager wanted for the older model with fewer features.

I've never leased a car because my mother worked at a dealership and I was always able to get my cars at cost before she retired.

 

[Xela M]

New cars are beautiful and have infinitely less problems than older cars (although depends how old and which make of course) but leasing is being in debt and I absolutely hated making huge monthly repayments, even though it was on a beautiful BMW 6-series convertable. It was a huge stress factor (plus the car drank unlimited amounts of petrol!)

 

[AxelAnnie]

Xela M - Oh....but didn't you feel great while driving it?