I think leasing a car is better than purchasing a new one. You are not locked into a vehicle for a long time, and once the lease is up, you can just turn it back into the dealership. The best thing about leasing is that you never have to use one car until you get bored because you can always think about another one!
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āBetterā comes down to whatever your priority is.
If itās more important for you to save money, then purchasing will be ābetterā.
If other factors are more important, like driving a new vehicle ever few years, then leasing is ābetterā.
Leasing cars will ALWAYS be more expensive. Period, end of statement, done. Most people canāt do the math but the dealer certainly can!
Leasing locks you into a car payment for 2,3 or 4 years. If you lose your job, you canāt sell the car and get out from under the payment. If you get a car that doesnāt work for your new situation, (pregnancy - Miata NO, minivan YES), you are stuck. There is very little financial flexibility.
That said, there are reasons to lease cars. If the car is your work car, you can write off the car as a business expense rather than depreciate it. You like driving new cars and donāt want the hassle of selling or trading your old one at 2 or 3 years.
The cheapest way to own cars is to buy 2-3 year old lease cars, drive them for 7 years or so, repeat. Is that a hint? Yes, you take advantage of the car lessorās wallet!
+1 to JoeMarioās comments.
I think that leasing is ābetterā for people who arenāt interested in doing maintenance on their cars.
I think that it is also (usually) better for a business that can deduct the cost of the lease.
On the other hand, since leasing is the most expensive method that one can use to possess a car, anyone who is interested in saving money will purchase their car, rather than leasing it.
I drive 40,000 miles a year and havenāt driven less than 25,000 miles a year in over 20 years. Leasing is NOT an option for me. I buy my vehicles and drive them into the ground or give them to my kids when I hit about 200,000 miles.
The least expensive method to have a car - buy a 2 to 3 year old car used, maintain it well and drive it for 7 to 10 years.
If you always want a new car and retire it every 2 to 3 years for a new one leasing can work. Not cheap but the no hassle factor is important to some drivers. The biggest downside of leasing is the miles per year terms. Most leases are for 12,000 miles per year with a high over mileage penalty. If you drive 20,000 miles a year the lease is very expensive.
I agree with the answers so far. Leasing is more expensive.
Iāll also point out that people who get rid of cars because theyāre āboredā are often the ones who end up in financial holes. Unless you have money to burn, I donāt suggest getting rid of a car for that reason.
From a strictly financial point of viewā¦leasing is the WORSE option available. If youāre the type of person who gets bored every couple years and donāt put a lot of miles on your vehicleā¦then Leasing is fine. But over 30 years youāll probably have wasted over $100k.
Leasing is best for people who cannot live without monthly car payments.
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If you lease a car, when the lease runs out you have zero equity in the vehicle. None. Nada, Zip. Zero. No trade in value, no car, nothing.
And during the course of the lease, you cannot trade the car, sell the car, allow the dings to go unrepaired, or even exceed a predetermined mileage without paying steep penalties. And you MUST keep records of all recommended maintenanceā¦ which might make doing it yourself unacceptable (check the terms of the leaseā¦ they can vary).
If the car has a chronic problem, youāre stuck with it. If you decide the seats are killing your back (happened to me) youāre stuck with it. If you get sick of the color, youāre stuck with it.
And forget about ever reaching the day when the car is paid for and you can relax and not make a car payment again. My car has been paid off for many years. Which, being retired, is a great blessing. If you lease carsā¦ forgetaboutit.
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I agree with the above posts. The only time a lease makes economic sense is for a business that can have a clean monthly business expense. Owning a car for a business gets messy, have to depreciate over the life of the car, great for accountants but too complicated for the average small business. I have bought many cars new and ran them till the wheels came off, this and buying a 2-3 year old car and doing the same is the least expensive in the long run. Many of my friends have newer cars, but mine are paid for and I retired early because I could afford to.
āLeasing is best for people who cannot live without monthly car payments.ā
Thatās itā¦in a nutshell. I have never had the want or the need to lease and I hope I never do.
Yep. I suspect the OP might be a dealer. They are really pushing leases again and people are drinking the Kool Aide. Do the cradle to grave math on both options is all and donāt forget the car has to be put back into perfect condition when its turned in again. If you want to drive a new car every three years, there is no reason not to buy and trade every three years.
Looking at the OPās ātagā, I suspect youāre right Bing. And I suspect the post is spam.
Iām not going to flag it, because Iād like anybody visiting to read the comments about leasing. IMHO that will do more good than having the thread deleted.
If the OP ever returns, perhaps heāll realize that the post just may have exactly the opposite effect in tended.
Mountain Bike:
I suspect you are right. The @rosevilleautom name is used for the Roseville Auto Mall in Roseville Ca.
There is also a rosevilleautom who registered yesterday on http://www.dronestagr.am/author/rosevilleautom/ for registering drones for the dealership. Thatās the same day as he/she registered here.
Credit Bing with this one. I missed it, he caught it.
Yup ! . . sales pitch.
against which we have beaten this horse numerous times. . . . . for any newbies reading here, search our previous chats.
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- āāyou are not locked into a vehicle for a long timeāā ? ? ā > but you ARE locked in to the DEALER for a long time , ie; you HAVE to take it back and get another one, fresh with a whole new set of payments !
rinse and repeat.
- āāyou are not locked into a vehicle for a long timeāā ? ? ā > but you ARE locked in to the DEALER for a long time , ie; you HAVE to take it back and get another one, fresh with a whole new set of payments !
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- āāyou can just take it back to the dealership.āā ? ? ā > you MUST take it back, or go broke buying a full priced used car !
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- you are also LOCKED into keeping you mileage down to their specs, or go broke again paying for that !
āLeasing is best for people who cannot live without monthly car payments.ā
^^^^
This is my nominee for Post of the Week!
This got me curiousā¦ Do you guys think more and more young people are leasing brand new cars over buying new cars ?. The thought of just trading it in after 3-4 years and leasing a newer car I bet is very appealing to younger driversā¦ Those who donāt work out the math anyways