To lease versus buy

[iamwiz82]

I'm looking at new cars once again and have come to this point. I have always been a strong supporter of buying rather than leasing, but this situation i am in perplexes me.


Options
---------

1. lease payment is x (2 years, 15000 miles) - this price also happens to be my current monthly payment on the vehicle to be traded

2. purchase payment is x + .5x (6 years, 4.24%)



both include a small trade-in, 1/4 of the cost of the car.

The car i am looking at is considered to keep its residual value very well, and will depreciate very little. Normally when shopping for cars, i look at ones that have very poor resale ability, and therefore the lease rates are much higher, but this very small lease rate is making look again.

I know i will own nothing at the end, however i will have saved a huge amount of money by paying half of that the purchase payment is and can put that towards a future car. Also, if i did not get this car, i would probably not purchase any car, and in 2 years time the vehicle would be worth nearly thing but paid off.

In all honesty, i am being swayed by the obscenely low lease price for a new car with lots of gadgets.

PS:

To throw some kinks in the equation:

1. I would save roughly $600/year on gas with the new car
2. Insurance would go down by $150/year with the new car

 

[Evadman]

what car are we talking about and what is the rate? Just curious.

<--- always buys. *shrug*

 

I'm a HUGE fan of leasing - sure, you're renting a car, but it's really no different than renting an apartment. You get to use a car for x amount of years, and you turn it (and all the problems that WILL inevitably creep up on a 4-5-8 year old car) in at then end of the term. If anything, it makes more sense to lease a car and buy a house (as houses generally appreciate and cars depreciate), because when you lease a car you're not stuck with a depreciating item with increasing problems at the end of your payments.

For some people, it makes sense.

 

[Ryan]

I'm sorry, but nothing short of someone practically giving a car away (IE - 50 bucks a month) will convice me to go along with a lease - I want something to show for my money.

Anywho, tell about this car you're looking at

 

[iamwiz82]

Originally posted by: rbloedow
I'm sorry, but nothing short of someone practically giving a car away (IE - 50 bucks a month) will convice me to go along with a lease - I want something to show for my money.

however, i would be saving a massive amount(more than i would be trading my current vehicle in for) by saving the cash not put on the purchase

 

[Vette73]

The only way a lease is a good deal is if you own a company and can write off the cost. If not buy.

 

[IamElectro]

Leasing is great if you dont go over the mileage if so it gets expensive.

Downsides are any damages even little things you are responsible for with the exception of normal wear ex. rockchips. They will hold you responsible for scratches, dents, some dings anything in the interior.

The big thing is the mileage I think of the top of my head its .25 per mile over. Consider this part very hard its almost a no no if you if you like to drive on any trips. 15k miles per year equals to about 41 miles per day.

At the end of the lease if you opt to but the price is usally what would be left if you bought the car new. ex 20k car in 2 years you pay say 6k in payment then the car will be around 14k maybe a little under to buy.
Then again you could always lease a new car.

 

Originally posted by: rbloedow
I'm sorry, but nothing short of someone practically giving a car away (IE - 50 bucks a month) will convice me to go along with a lease - I want something to show for my money.

I guess I just don't really understand your mentality. It's okay (according to most) to rent an apartment, and pay $600-$1500/mo. for a place to live, with nothing to show. But, when it comes to cars, people ALWAYS buy, and then after 5-6 years they're left with a $25,000 car that needs $500-$1000 of work every year.

Cars depreciate - why get stuck with something that goes down in value?
Houses appreciate - why not buy into an investment, instead of throwing your money away on an apartment?

 

[Ryan]

Originally posted by: iamwiz82

Originally posted by: rbloedow I'm sorry, but nothing short of someone practically giving a car away (IE - 50 bucks a month) will convice me to go along with a lease - I want something to show for my money.

however, i would be saving a massive amount(more than i would be trading my current vehicle in for) by saving the cash not put on the purchase

If you don't mind having nothing to show for your money once the lease is up, then go for it (it is a good deal if you look at it from that perspective). To me though, it's unacceptable.

So, are you gonna tell us what this car is or what?!!?

 

[iamwiz82]

overmileage is 20 cents per mile however i believe i may buy more upfront. Currently, we drive around 16,500 miles per year on both daily drivers. It could easily be toned down, though.

 

[Spac3d]

Originally posted by: Marlin1975
The only way a lease is a good deal is if you own a company and can write off the cost. If not buy.

 

[Ryan]

Originally posted by: jumpr

Originally posted by: rbloedow I'm sorry, but nothing short of someone practically giving a car away (IE - 50 bucks a month) will convice me to go along with a lease - I want something to show for my money.

I guess I just don't really understand your mentality. It's okay (according to most) to rent an apartment, and pay $600-$1500/mo. for a place to live, with nothing to show. But, when it comes to cars, people ALWAYS buy, and then after 5-6 years they're left with a $25,000 car that needs $500-$1000 of work every year. Cars depreciate - why get stuck with something that goes down in value? Houses appreciate - why not buy into an investment, instead of throwing your money away on an apartment?

Well, I'm also against renting too, so I guess you really don't understand my mentality Also, significant money has to be invested into a house yearly for it to hold it's value, something you haven't taken into account

 

[iamwiz82]

Originally posted by: rbloedow

Originally posted by: iamwiz82

Originally posted by: rbloedow I'm sorry, but nothing short of someone practically giving a car away (IE - 50 bucks a month) will convice me to go along with a lease - I want something to show for my money.

however, i would be saving a massive amount(more than i would be trading my current vehicle in for) by saving the cash not put on the purchase

If you don't mind having nothing to show for your money once the lease is up, then go for it (it is a good deal if you look at it from that perspective). To me though, it's unacceptable.

So, are you gonna tell us what this car is or what?!!?

but having a large sum of money in a savings account accuring interest is something to show, yes?

 

Originally posted by: rbloedow

Originally posted by: jumpr

Originally posted by: rbloedow I'm sorry, but nothing short of someone practically giving a car away (IE - 50 bucks a month) will convice me to go along with a lease - I want something to show for my money.

I guess I just don't really understand your mentality. It's okay (according to most) to rent an apartment, and pay $600-$1500/mo. for a place to live, with nothing to show. But, when it comes to cars, people ALWAYS buy, and then after 5-6 years they're left with a $25,000 car that needs $500-$1000 of work every year. Cars depreciate - why get stuck with something that goes down in value? Houses appreciate - why not buy into an investment, instead of throwing your money away on an apartment?

Well, I'm also against renting too, so I guess you really don't understand my mentality Also, significant money has to be invested into a house yearly for it to hold it's value, something you haven't taken into account

Heh, I just assumed you were okay with renting. It's all good.

 

[Koing]

Originally posted by: jumpr

Originally posted by: rbloedow
I'm sorry, but nothing short of someone practically giving a car away (IE - 50 bucks a month) will convice me to go along with a lease - I want something to show for my money.

I guess I just don't really understand your mentality. It's okay (according to most) to rent an apartment, and pay $600-$1500/mo. for a place to live, with nothing to show. But, when it comes to cars, people ALWAYS buy, and then after 5-6 years they're left with a $25,000 car that needs $500-$1000 of work every year.

Cars depreciate - why get stuck with something that goes down in value?
Houses appreciate - why not buy into an investment, instead of throwing your money away on an apartment?

Stick with your old car. Having a nice car is exactly that, nice.

If the car moves from A to B and is safe and has the amount of room you need stay with it.

Do not lease a car unless you *really* want it. You end up with nothing at the end.

The cars that my dad has owned and I have driven have given us no problems. They certainly do not need $500-$1000 every year after 5-6yrs+ to keep running. We drive them until they are worth £1k or less and drive them until they do not require a job fix that is more expensive then the car is worth.

Unless a nice looking car is important for your line of work then I would not get a car on lease. I would buy the car outright then run it in to the ground.

Leasing is not an option for me on anything. I will save and buy thankyou.

Koing

 

[FoBoT]

don't lease a car
don't lease a car
don't lease a car
don't lease a car

 

[ElFenix]

Originally posted by: jumpr

Originally posted by: rbloedow
I'm sorry, but nothing short of someone practically giving a car away (IE - 50 bucks a month) will convice me to go along with a lease - I want something to show for my money.

I guess I just don't really understand your mentality. It's okay (according to most) to rent an apartment, and pay $600-$1500/mo. for a place to live, with nothing to show. But, when it comes to cars, people ALWAYS buy, and then after 5-6 years they're left with a $25,000 car that needs $500-$1000 of work every year.

Cars depreciate - why get stuck with something that goes down in value?
Houses appreciate - why not buy into an investment, instead of throwing your money away on an apartment?

this is the dumb sort of stuff they say on the radio when they talk about how great leasing is.

1. no, its not ok to be wasting your money leasing an apartment. thats why people move out of apartments and into houses. but, to make a house work, you need to be in it for a few years, and improve it (houses built without explicit instructions from a potential owner use really low grade stuff), which is why really transient types don't have houses.

2. you're not saving money leasing a car vis-a-vis buying one. cuz with buying,, hey, you have equity! the car still loses just as much value buying and leasing, and what you pay for is lost value either way because when you're done with a car, you sell it. even if you buy a car every 3 years you're not losing money vs a similar lease.

3. if you're keeping a car 6 years you're saving tons of money vs leasing a new one every 3 or buying a new one every 3. sell it before it needs 1000 of work each year (which, by the way, is still cheaper than your lease or buy payment is every year. and frankly, most cars on the market not from some crappy korean make won't need that much work until the 10th year!)

4. its damn near impossible to calculate a lease by hand. you can easily calculate a buy payment given the amount financed and the APR, you can't do it with a lease. no number on that contract is legally binding except the one that says how much you owe, so unless you're sitting there notebook in hand with lease software that someone like your state AG uses to crack down on dealers with you're going to get screwed without recourse.

 

[iamwiz82]

the residual value of this car after 3 years is going to be very very high when compared to the market, nearly 20% higher than the rest of its market segment.

I prefer to get new cars as my daily drivers and leave the long term ownership to my Jeep

 

[Kelemvor]

Normally it boils down to this...

If you think you normally keep cars until they die or start breaking a lot, you'r ebetter off buying a car. Much cheaper in the long run. However, If you buy a car and then sell it and get a new one every few years, then Leasing is definitely the way to go.

 

[Excelsior]

jumpr - Do you think everyone has an apartment or something?

Anyways..leasing..no. Never. Its like pissing money out the window of "your" new car that really isn't yours. We just buy salvage/wrecks and rebuild them. We repaired a 2001 Passat (leather, etc) with only 20k miles for 9k total, and did the same with a 99 Passat for $8500.

 

[zephyrprime]

Renting is evil! Ok, maybe not really evil but a bad financial decision if at all avoidable. Leasing is a much much lesser evil than renting.

 

[iamwiz82]

Originally posted by: Excelsior
jumpr - Do you think everyone has an apartment or something?

Anyways..leasing..no. Never. Its like pissing money out the window of "your" new car that really isn't yours. We just buy salvage/wrecks and rebuild them. We repaired a 2001 Passat (leather, etc) with only 20k miles for 9k total, and did the same with a 99 Passat for $8500.

never would i buy a salvage. Too many gremlins could be hiding within that crushed sheetmetal.

 

[Amused]

Originally posted by: rbloedow
I'm sorry, but nothing short of someone practically giving a car away (IE - 50 bucks a month) will convice me to go along with a lease - I want something to show for my money.

Anywho, tell about this car you're looking at

You'd have nothing to show for most of your money even if you bought the car. Why? Depreciation.

If you buy at 700 a month, or lease at 500 a month, either way, you're throwing 500 a month away for the depreciation of the car and interest.

With buying, you only have the EXTRA you paid over leasing to show for at the end of the term. You've still lost most of your money.

Leasing can be a good deal, especially on cars with good projected resale values. But only if you drive under 12,000-15,000 miles a year and take VERY good care of your cars.