So what? You’re paying for the use of the car, not an “investment” in a depreciating asset.
I don’t believe in monthly payments, but sure, $293 a month is a reasonable cost to own a car. I certainly wouldn’t agree to pay that (plus fees, taxes, etc.) to drive a car that I don’t own. Obviously there are people who feel differently; otherwise leases wouldn’t even exist.
Although I would never buy a car on credit, and I sure as heck wouldn’t lease one, I do pay attention to the monthly cost of ownership, even though I’m not writing a check each month. This monthly cost of ownership goes down the longer I own the car, and I like keeping a car for a long, long time.
Thus far, the car with the most expensive monthly cost–including the purchase price, having the timing belt replaced professionally, maintenance which I did myself, and the two tires I just purchased–comes to a little over $180 per month. The only reason this monthly cost is so high is because I have only owned this car for 15 months. The cheapest monthly cost has been my 2004 Toyota Corolla; including the purchase price, repairs, and maintenance, this car has cost less than $105 per month.
No point hashing all that again-lease vs purchase. 6 of one half dozen of another. On average a new car will depreciate about 50% in four years. So you can buy a $25,000 car and have it worth about $12,000 for trade in. Or you can pay the $12-14,000 total for a four year lease and end up with nothing and start over again. It’s just math. Then you can make it more complicated by figuring lost or gain on investments and so on, or figuring if they are giving special low ball lease rates or if interest rates are low. Just depends what you want to do and current financial situation. A guy has to do what a guy has to do. I’ll add though that most leases I’ve seen are around $2-3000 up front plus tax and license. I’d be a little hesitant to pay $7000 up front.
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Here’s something which hasn’t been mentioned yet . . .
If op leases a car, he’ll be forced to pay comprehensive insurance, which can be a lot of money
If he buys a used car outright or pays to fix his existing car, he can buy cheapo insurance
As you said, it’s just math
Some cars depreciate far less in those 4 years . . .
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