It's getting close to time to get a new vehicle for the wife. She only drives a short distance to work and we would use it for vacations a couple times a year. Are there any pros/cons to leasing instead of buying? Thanks for all input.
OT: Buy or Lease New Vehicle
- Thread starter SteelDawg03
- Start date
If you get a new car every 2-3 years - I would lease.
If you keep your car 5+ years - I would buy.
If you keep your car 5+ years - I would buy.
You're almost always going to come out better in the long run if you buy the car. The initial monthly payment is lower with a lease, but you'll have nothing at the end of the lease term and you're setting yourself up to make car payments for the rest of your life.
Think of a lease as a glorified rental. Remember when you take it back at then end of the lease they will go over it with a white glove and a fine comb.
And make sure you know there is little chance of going over miles
And make sure you know there is little chance of going over miles
I lease a car back in the 90's. I ended up buying the dang thing because my milage was so far over what was allowed it was only a $4000.00 difference between what I owed and what I could buy it for. You think that you will not put many milage on them but you will and you will owe at the end. I will never lease again.
Buy it cash if you can, but buy Certified PreOwned or loaners from the dealership if you're going to finance.
Even at the end of 3 years, you'll have an asset to trade in if you choose to buy again at that point as opposed to having pissed away 3 years of payments along with the lease downpayment.
Even at the end of 3 years, you'll have an asset to trade in if you choose to buy again at that point as opposed to having pissed away 3 years of payments along with the lease downpayment.
Interest rates are friendly.
You can get a good financing deal these days if you do your homework on what you should pay for whatever vehicle you are interested in.
Is buying used an option? I haven't done the math in awhile, but before interest rates tanked, buying a good condition 2-3 year old vehicle was the way to go from a dollars/cents perspective. You are essentially buying something at 70-80% of it's original condition for 50% of its original value (i.e. somebody else paid the accelerated depreciation for you).
You can get a good financing deal these days if you do your homework on what you should pay for whatever vehicle you are interested in.
Is buying used an option? I haven't done the math in awhile, but before interest rates tanked, buying a good condition 2-3 year old vehicle was the way to go from a dollars/cents perspective. You are essentially buying something at 70-80% of it's original condition for 50% of its original value (i.e. somebody else paid the accelerated depreciation for you).
I'm an auto broker and can help you out whatever way you want to go. PM me.
Leasing is great if you set it up properly. 90% of the time, the residual value (what you can buy it for at the end of the lease) is considerably lower than wholesale value. So, you don't turn the car in....you buy it out, and sell it for a profit. Most people don't do this, but it's easy money. Here's where I come in, I'll either buy it off of your lease and pay you a finder's fee, or I'll sell it for you on consignment.
Leasing is great if you set it up properly. 90% of the time, the residual value (what you can buy it for at the end of the lease) is considerably lower than wholesale value. So, you don't turn the car in....you buy it out, and sell it for a profit. Most people don't do this, but it's easy money. Here's where I come in, I'll either buy it off of your lease and pay you a finder's fee, or I'll sell it for you on consignment.
Did it once, would never lease again
In 2001 my wife needed a better car, her daily commute to work was about 5 miles round trip and we could lease more car than we could afford to buy, so we leased a new Nissan Maxima.
Three years later we were several thousand miles over the limit. Also, in their turn-in inspection they said the tire wear was excessive and the windshield was broken. They handed us a bill for the three issues together that was about a third of the retail value of the car.
The windshield did have a peck, which we had had repaired, but under the agreement it had to have new glass. Instead of making car payments forever or getting completely raped in the turn-in I was able to find a set of used tires with just enough tread to pass muster and put those on, and I know a guy in the windshield business, so those together cost about $350. I think we were out about $1,200 total to turn it in.
12,000 or 15,000 miles per year may sound like plenty, but if you ever actually drive anywhere, it's just not. If you drive less than 12K miles per year, you could damn near take a cab or walk and come out ahead.
I hate to never say never, but it would be a really cold day in hell before I leased a car again.
In 2001 my wife needed a better car, her daily commute to work was about 5 miles round trip and we could lease more car than we could afford to buy, so we leased a new Nissan Maxima.
Three years later we were several thousand miles over the limit. Also, in their turn-in inspection they said the tire wear was excessive and the windshield was broken. They handed us a bill for the three issues together that was about a third of the retail value of the car.
The windshield did have a peck, which we had had repaired, but under the agreement it had to have new glass. Instead of making car payments forever or getting completely raped in the turn-in I was able to find a set of used tires with just enough tread to pass muster and put those on, and I know a guy in the windshield business, so those together cost about $350. I think we were out about $1,200 total to turn it in.
12,000 or 15,000 miles per year may sound like plenty, but if you ever actually drive anywhere, it's just not. If you drive less than 12K miles per year, you could damn near take a cab or walk and come out ahead.
I hate to never say never, but it would be a really cold day in hell before I leased a car again.
Never trade without contacting me first
This goes for anyone reading this. You don't get **** for trade in value no matter where you go. I'll buy your car for considerably more. I also shop at auction for customers - if you want real savings, this is how you do it. Shop where the dealers shop and pay what dealers pay for their inventory. Unless you just want to buy new and piss your money away.
This goes for anyone reading this. You don't get **** for trade in value no matter where you go. I'll buy your car for considerably more. I also shop at auction for customers - if you want real savings, this is how you do it. Shop where the dealers shop and pay what dealers pay for their inventory. Unless you just want to buy new and piss your money away.
I used to buy, but leased one about two years ago. Free oil changes, tire
replacement for damage, free windshield repair if needed, roadside assistance, dent and ding repair, and of course the full warranty is in effect the whole time. I also have a fixed purchase price, so I know what it will cost if I want to buy it. I used to be in outside sales, so the mileage was prohibitive, but I'm not anymore and I'm way under my mileage. It's possible it will be worth more than I owe, so I can trade it in and have equity in it. I kept thinking I was going to buy my last two cars and keep them a long time, but invariably they need some big repair after 4 years or so. I love the idea that there is pretty much nothing that can happen that I'll have to pay for. All repairs etc. are covered. Plus the payments are way lower than if I bought it.
In another year I may keep the car, or get a new one.
replacement for damage, free windshield repair if needed, roadside assistance, dent and ding repair, and of course the full warranty is in effect the whole time. I also have a fixed purchase price, so I know what it will cost if I want to buy it. I used to be in outside sales, so the mileage was prohibitive, but I'm not anymore and I'm way under my mileage. It's possible it will be worth more than I owe, so I can trade it in and have equity in it. I kept thinking I was going to buy my last two cars and keep them a long time, but invariably they need some big repair after 4 years or so. I love the idea that there is pretty much nothing that can happen that I'll have to pay for. All repairs etc. are covered. Plus the payments are way lower than if I bought it.
In another year I may keep the car, or get a new one.
THIS^^^^
My Jeep Cherokee I leased in college was worth 4k more than I owed, so that was my down payment when I bought my next car. Knowing what I owe on my current lease when it's up, I SHOULD owe less than it's worth. So I can either buy it, or trade it in for another one. You can also get extra mileage if you get it up front for pretty cheap. There are pros and cons of both. I finally admitted I'll probably always have a car payment, so I like the lower one for a lease.
My Jeep Cherokee I leased in college was worth 4k more than I owed, so that was my down payment when I bought my next car. Knowing what I owe on my current lease when it's up, I SHOULD owe less than it's worth. So I can either buy it, or trade it in for another one. You can also get extra mileage if you get it up front for pretty cheap. There are pros and cons of both. I finally admitted I'll probably always have a car payment, so I like the lower one for a lease.
A car I never thought I'd own... a Volkswagen CC. I love it. It's shockingly fast, and loaded with features, I think I have the "Lux Plus" edition. The VW dealership is extremely friendly too. I had to pay a little extra for all the protections, but I'd rather pay $50 a month than worry about a big repair. And I go through tires quickly for some reason. I hit a pothole and they gave me a free tire and a new wheel, because it had a gouge in it. My car looks like:
CarMax actually helped me a lot. I went buy with my car that I thought they'd
value at almost nothing, but they gave me a great quote to buy it from me. I then used that quote to force the dealership to give me that trade in value.
value at almost nothing, but they gave me a great quote to buy it from me. I then used that quote to force the dealership to give me that trade in value.
I will pay more than the carmax appraisal 100% of the time. For future reference for you or anyone.
How does that actually work? Do you fly in to look at it? How does it travel the 1,000 miles to get to you? I'm wondering how you don't get screwed by there being some problem that's hard to detect with a casual glance. Just curious.
Carmax goes over the car pretty well. They look at the body, under the hood, transmission, tires, brakes, etc. Whatever they offer (takes into account any issues the car has), I can pay more and still make money. For example, I have a Honda Odyssey right now that they offered $7k on...I'll get at least $12k for it. Even if I have to pay $500 (which is a very high estimate for anywhere in the SE) to get the car to me, it's still a win.
ETA - to actually answer your questions - I don't need to see it, I just require the Carmax apprasial sheet. I can fly in to drive the car back, or ship in on a carrier.
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Buy a good used 2006 or later Honda Accord with 100k or less miles. You will drive it for the next decade with few problems and save a ton of cash. If you have to borrow money on a depreciating asset, do your research and have a plan for doing away with car payments for the rest of your life. People don't plan to fail, they fail to plan.
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^^^ Perfect advice. All you need to know.
In other words, if you are going to always have a car note - lease.
If you plan on paying it off and not having a note for a while, buy.
In other words, if you are going to always have a car note - lease.
If you plan on paying it off and not having a note for a while, buy.
Leasing is also a way to get rid of negative equity. For instance, my wife had an SUV that we continued to pour money into fixing and it blew a headgasket. We got it fixed and some more things started happening. We ended up leasing a new car and at the end of the lease we leased another. We are going to buy this one at the end and the negative equity from the SUV will no longer exist. Whereas it would have if we had bought the first leased vehicle.
Also, i will never trust Carmax. I went to trade in a sportscar that i had special ordered new. I was at the dealer to take delivery when they got it off of the truck. Never wrecked, not a scratch on her. When i tried to trade it in at Carmax in Jackson, they told me that the car had been on a frame straightener. I just laughed and took my keys.
Also, i will never trust Carmax. I went to trade in a sportscar that i had special ordered new. I was at the dealer to take delivery when they got it off of the truck. Never wrecked, not a scratch on her. When i tried to trade it in at Carmax in Jackson, they told me that the car had been on a frame straightener. I just laughed and took my keys.
There's nothing wrong with carmax in general, but every company has ****** employees every once and a while. Fact is, there's not a big market for special ordered sports cars. They take forever to sell and never provide the profit you expect. Even if they hadn't found fictional frame damage, they wouldn't have offered you what you wanted.
Dawgnatique - I'm in Roswell Ga, suburb of Atlana.
Dawgnatique - I'm in Roswell Ga, suburb of Atlana.
Hmm ... what about if you keep it 4 years .... Haha.
I've leased before and didn't like it. I never felt that it was "my" car ... always seemed like I was driving a rental (which I was, but still ...). Not sure if others would be afflicted in a like manner, but it's something to consider. Also, if you drive a moderate amount watch the allowed mileage ... some leases are low mileage and you can wind up paying some hefty penalties. And you never have any true equity in the car.
There are certainly pluses and minuses either approach. But the main thing is ... how long you normally keep a car. And buying a low mileage one that's a year or so old is a good route too.
I've leased before and didn't like it. I never felt that it was "my" car ... always seemed like I was driving a rental (which I was, but still ...). Not sure if others would be afflicted in a like manner, but it's something to consider. Also, if you drive a moderate amount watch the allowed mileage ... some leases are low mileage and you can wind up paying some hefty penalties. And you never have any true equity in the car.
There are certainly pluses and minuses either approach. But the main thing is ... how long you normally keep a car. And buying a low mileage one that's a year or so old is a good route too.