Lease vs buy

[Zivic]

5th NEW car or just 5th car?

I can't imagine having 5 new cars at that point unless you're also including your wife's cars. That's over 100k just on cars.

I have had 5 cars that I have bought new. well over 100k bucks, but have regained a good part of that back when I sold them. If you buy and sell correctly, you don't take that big of a hit. Most my cars end up costing me about 150/month to own when all is said and done

 

[redgtxdi]

What if the basic math made lease vs buy a wash???

Would it be worth it more to lease then???

Obviously if you could lease a $50K Mercedes for $399/mo for 3yrs w/ $3k down then it's a no brainer. But if it were a $35K Hyundai for $399/mo for 3yrs w/ $3k down then there's more to consider.

???

 

[the DRIZZLE]

What if the basic math made lease vs buy a wash???

Would it be worth it more to lease then???

Obviously if you could lease a $50K Mercedes for $399/mo for 3yrs w/ $3k down then it's a no brainer. But if it were a $35K Hyundai for $399/mo for 3yrs w/ $3k down then there's more to consider.

???

There's no easy math. Because of the time value of money you really need a financial model to accurately compare the two.

 

[mvbighead]

I suppose leasing makes sense for some people, I am not one of them. Hell, even after living less than 10 miles from work, I have managed to put 50k miles on one car in 3 years.

And now that I haven't had a car payment in just under a year, I am wondering why the hell I ever got myself into one. To me, people tend to get this stigma that the only way they'll ever have a reliable vehicle is if they buy it brand new.

Sorry kids, but that guy you see driving around in a 5-10 year old car is getting back and forth to work, day after day, without a car payment. He'll have an occasional issue that needs to be fixed, but 9/10 issues are more convenience/nuisance types and not the car won't run types.

Then I read about guys with a new Ford Edge (or some other Ford SUV model I can't recall) with engine issues after less than 5k miles, and dealing with taking it back and forth to the shop for them to figure out what is wrong with it. The beauty of my 2000 Jeep GC is that there are a number of them out there, and when I take it to my mechanic (for anything I don't fix myself), he'll likely have dealt with that particular issue and be able to resolve it with little trouble.

Point being that ALL cars have problems at one point or another. I find myself being more happy with a car that simply works and has the features I want, despite the age of the vehicle. And if something about my car displeases me, I'll either get it fixed or move on to a different old car. Hell, my aunt recently purchased a new Saturn Vue AWD with a 4 cylinder. She hates it because it shifts like bananas, so she sticks to driving her 4-5 year old Saturn Vue that has a manual transmission.

The only point worth illustrating here is that new and old cars are going to each have their own issues to deal with. For me, newer cars are more or less a vanity thing. Some people deal with three problems on a used car and get soured because used cars are too much work. Little do they know, they may have fixed the majority of issues that needed fixin just before they sold it off to someone else because it was too much trouble.

For me, I have dealt with a number of issues since buying my older Jeep. But I have just about got everything ironed out and it is a very sound automobile. And instead of putting 200+ towards a car payment, I get to put an extra 200 bucks in my pocket every month. Occasionally, that 200 bucks goes towards a repair. But I still managed to deal with maintenance related expenses while making payments on a newer car, so I am still ahead, IMO.

 

[ShawnD1]

Sorry kids, but that guy you see driving around in a 5-10 year old car is getting back and forth to work, day after day, without a car payment. He'll have an occasional issue that needs to be fixed, but 9/10 issues are more convenience/nuisance types and not the car won't run types.

But the cost of fixing these greatly depends on how mechanically inclined you are. If you know what you're doing or you have the time to play with it, fixing a car is dirt cheap and sometimes free (jiggle/clean something). For people who can do this, used cars are a great bargain.

If you don't know what you're doing or you don't have the tools or you don't have the time to spare (this is your only vehicle and you can't miss work), fixing stuff gets ridiculously expensive. I once called a place to ask how much it costs to replace the brakes because I didn't want to do it myself. $300. I wasn't $300 lazy so I called my dad for help and we got er dun for less than $40 for the parts then another $20 for a tool neither of us had.

Now imagine every repair like that because you don't know anything about cars. $300 for the brakes. Maybe $500 for the tie rods. $500 for the shocks. $100 to replace spark plugs. $200 to recharge the AC. $1000 to fix the door locking mechanism. $1000 to replace the clutch. Suddenly that new car doesn't look too bad. It's expensive up front but it doesn't need any of these repairs for at least 5 years and even if it does happen it's still covered by warranty.

Buying a new car is like buying an Apple computer. You pay a lot more than it's worth because there's some assurance that it will work. You won't need to pay Geek Squad $100 to install windows or $100 to remove a virus then another $100 to removal all the garbage that was pre-installed.

 

[Zivic]

But the cost of fixing these greatly depends on how mechanically inclined you are. If you know what you're doing or you have the time to play with it, fixing a car is dirt cheap and sometimes free (jiggle/clean something). For people who can do this, used cars are a great bargain.

If you don't know what you're doing or you don't have the tools or you don't have the time to spare (this is your only vehicle and you can't miss work), fixing stuff gets ridiculously expensive. I once called a place to ask how much it costs to replace the brakes because I didn't want to do it myself. $300. I wasn't $300 lazy so I called my dad for help and we got er dun for less than $40 for the parts then another $20 for a tool neither of us had.

Now imagine every repair like that because you don't know anything about cars. $300 for the brakes. Maybe $500 for the tie rods. $500 for the shocks. $100 to replace spark plugs. $200 to recharge the AC. $1000 to fix the door locking mechanism. $1000 to replace the clutch. Suddenly that new car doesn't look too bad. It's expensive up front but it doesn't need any of these repairs for at least 5 years and even if it does happen it's still covered by warranty.

Buying a Honda is like buying an Apple computer. You pay a lot more than it's worth because there's some assurance that it will work. You won't need to pay Geek Squad $100 to install windows or $100 to remove a virus then another $100 to removal all the garbage that was pre-installed. -

ya, been then you are stuck with an apple computer.... kind of like driving a car, that doesn't allow you to take the scenic route to work, or enjoy the twisties on the weekends. an apple car would only let you drive on the freeway at a predfined speed. Sure, it will get you there, but why pay a premium for that?

some people put a lot of weight on a factory warranty... like it gaurantees them a troublefree/no out of pocket expense ownership experience. Buying a new car for a warranty is a bit naive, and a big premium to pay.

I have bought new cars. In some instances, I like being the only owner to drive the car. I see how other people drive and how they "fix" and/or "maintain" their vehicles and it flat out scares me to think of owning a used car sometimes.

Leasing allows a person that is committed to having a payment drive a better vehicle than they normally could afford and drive basically a new vehicle all the time. I don't see a whole lot of harm in that.

I currently have a car payment over 550 bucks. Heck, I have had two car payments at a time that totaled nearly a grand a month (well north of even my mortgage payment). That was a bit much I will admit, but I have gone good streches of time without a payment, and to be honest, my life is no different in any of the cases. I don't worry about the payment(s) when I have them, I don't sleep any better when I don't have them.

Now, I will only make a payment on a car I use for utility. Any fun car I choose to buy will be bought and paid for upfront

 

[mvbighead]

But the cost of fixing these greatly depends on how mechanically inclined you are. If you know what you're doing or you have the time to play with it, fixing a car is dirt cheap and sometimes free (jiggle/clean something). For people who can do this, used cars are a great bargain.

If you don't know what you're doing or you don't have the tools or you don't have the time to spare (this is your only vehicle and you can't miss work), fixing stuff gets ridiculously expensive. I once called a place to ask how much it costs to replace the brakes because I didn't want to do it myself. $300. I wasn't $300 lazy so I called my dad for help and we got er dun for less than $40 for the parts then another $20 for a tool neither of us had.

Now imagine every repair like that because you don't know anything about cars. $300 for the brakes. Maybe $500 for the tie rods. $500 for the shocks. $100 to replace spark plugs. $200 to recharge the AC. $1000 to fix the door locking mechanism. $1000 to replace the clutch. Suddenly that new car doesn't look too bad. It's expensive up front but it doesn't need any of these repairs for at least 5 years and even if it does happen it's still covered by warranty.

Buying a Honda is like buying an Apple computer. You pay a lot more than it's worth because there's some assurance that it will work. You won't need to pay Geek Squad $100 to install windows or $100 to remove a virus then another $100 to removal all the garbage that was pre-installed.

Yeah, there is some excellent truth to that.

I guess my thought is the guy who buys new (or newer used) and keeps it for ten years will tend to know what is going on with the car. So rather than letting issues pile up, he'll get them fixed as the issues are encountered. If you pay the car off in 5 years (a $25,000 car for instance), and the resale value of the car at that point is probably around 8k or so, and the cost of the new one is 25k, do you really think you'll spend 17k keeping your 5 year old car on the road? Even if every bit of maintenance is done by a mechanic in a mechanic's shop?

I know my mechanic ain't the cheapest in town, but I trust them to get the job done right. If they ever miss something or something isn't quite fixed, they've yet to charge me for correcting a mistake. But I'd bet my money would stay in my pocket longer if I just keep the car while it is serviceable and while I know what issues I am dealing with on it.

At any rate, my Jeep is a whole different experience as I purchased it from the point where someone else left off. Numerous things had to be resolved, but now that they have been, I just have to keep filling her up and getting her oil changed and she should be fine.

 

[ShawnD1]

some people put a lot of weight on a factory warranty... like it gaurantees them a troublefree/no out of pocket expense ownership experience. Buying a new car for a warranty is a bit naive, and a big premium to pay.

The warranty is expensive but sometimes it's nice to have. My transmission was replaced under warranty and the warranty claim amount on the sheet I had to sign said the repair cost was something like $4200 for parts + labor. If that was a used car, I'd be screwed, and that does happen. Both of my parents admit to selling cars because they knew the transmission was going to screw up. My brother and my best friend have also felt the sting of lemon used cars. There are a lot of great used cars out there but there are also a lot of lemons. It's hard to know which one you'll get.

I have bought new cars. In some instances, I like being the only owner to drive the car. I see how other people drive and how they "fix" and/or "maintain" their vehicles and it flat out scares me to think of owning a used car sometimes.

You wouldn't want to buy a car driven by me



Most of the gain is psychological. When you buy a new car, you feel the sting up front then it's out of mind. When you buy a lemon, you feel that sting over and over again. $200 here, $100 there. It damages your emotions more than it damages your wallet.
The same effect is seen with good gas mileage. Buying a hybrid is painful up front but the owners always feel like they are saving money when they buy gas. An accountant would say it never breaks even, but the person driving that hybrid feels like they save money, and that's what matters (sometimes).