Is It Better To Lease or Purchase New Cars?


#61

My wife has objections to the Kia name too, for some naughty kid in school, but I have two Hyundai’s now in my fleet. They drive fine, one is too new to know but the other one has just needed oil change from 20 to 40 K miles and the ride/handling is much better than a Camry. They do depreciate more which makes it a great buy for me, CPO 2 year old seems to be the sweet spot. The Tucson also feels much better than the 2011 Honda CRV we used to have.


#62

@CSA KIA is the fastest growing car company in the USA. There arte now almost as many KIA dealers as Hyundai dealers. From your post I guess that you live in Death valley or in rural New Mexico.

The last new car we bought was a Mazda, but the next choice was a KIA. That dealership was about 2 miles further away than the Mazda dealer. The dealer location did not influence our decision.


#63

@Docnick
It’s Asian And European Cars With No Dealers Near Me. Those Really Are Foreign Cars, Here.

I can go to town (20 miles away) and find Jeep/Chrysler/Fiat, Ford/Lincoln, Chevrolet/Buick, and Cadillac/GMC dealers. Also, I can drive less than an hour in 3 or 4 directions and find other dealers of these vehicles.
CSA


#64

“KIA is the fastest growing car company in the USA.”

That may be the case, but no make of car sells as fast (after arriving on dealer lots) as Subaru.

Over the past 12 months, the average amount of time that a Subaru sat on a US dealer’s lot before being sold or leased was 16 days, and for the Outback model, it is only 14 days. The demand is so high that Subaru will soon cease assembling Toyota Camrys at their plant in Lafayette, Indiana, so that the entire factory can be used for Outback/Legacy production.


#65

VDCdriver
"That may be the case, but no make of car sells as fast (after arriving on dealer lots) as Subaru."

My Son Drives Past A Small Subaru Dealer On His Work Commute. That’s How He Found The Outback He Recently Bought. It Had Just Been Put On The Lot And Passersby Were Practically Fighting Over It! He notices vehicles on the lot and they turn over fast. He Saw His Particular Car Advertised Locally, Too.

My son thought it was priced extremely well (he had done his homework) while he was looking at it a salesman walked a customer out, stuck a plate on it and sent it out for a test drive. My son figured it was gone. The guy left saying he’d be back and my son bought it. Turns out they priced it about 2 thousand below what they had intended by mistake, balked a little, but honored the sale price. The price on the vehicle was two grand higher and still would not have been there long. It would have sold as priced on the car.

These Subarus have almost a cult following and I’m sure some of the highest repeat buyers. He just attended a Subaru Event at a ski area where he went skiing, hosted by Subaru. He got all kinds of freebees, hats, mugs, etcetera, just by showing a Subaru key.
CSA


#66

"That may be the case, but no make of car sells as fast (after arriving on dealer lots) as Subaru."
I Might Ad, That For This Reason They “Don’t Give These Cars Away” When They’re Pre-Owned!
CSA


#67

@csa Remarkable that there are areas where so called “foreign” cars have not penetrated yet.

We are lucky here to have a good mix; within a 10 minute drive we have a Toyota, Scion/Toyota, Honda, Nissan, Hyundai, Kia, Mazda, 2 Chrysler, a GM, a Ford, BMW, Mercedes, Lexus, Infiniti, Land Rover, Audi, Acura, and even a new Lamborghini dealer.

The Toyota dealer does the most business. The US dealers need their trucks to stay in business.


#68

Yeah I’m generally against leasing but then I see the $339 a month and wonder. Then I look more closely and get the calculator out. $2500 down, plus $800 tax, plus $300 license and 10K miles a year or 30 cents a mile. That would be another $5000 for me. Plus any other issues to put it back in condition again at turn in. All in all not much of a deal.


#69

“Remarkable that there are areas where so called “foreign” cars have not penetrated yet.”

Years ago, some of the US independent car mfrs had a problem with “spotty” representation in some of the more sparsely-settled parts of the country. Studebaker, while having a very good dealer network in the mid-west, the northeast, and in California, suffered from not having a whole lot of dealers in the deep south, the mountain states, and the southwest.

When Nash merged with Hudson, back around 1956, the major reason why Nash wanted that merger was to broaden their dealer network. They had no real interest in Hudson’s manufacturing facilities, and they had absolutely no desire to continue to sell Hudsons. After a year or so, the Hudson name was retired, but the new American Motors Corp wound up with a much stronger dealer network than they previously had.


#70

And I park on the street. Any car I drive has major bumper scratches and gouges in a few months. After a few years, both bumpers are covered with those. For a lease, (I assume) I would have to replace both of those. Thousands of dollars…


#71

VDCdriver: Fortunately my 7 months in a combat zone (former Yugoslavia) conspicuously lacked combat so we had no KIAs. We had a stress clinic staffed by a Psychiatrist and staff who were like the vintage commercial’s Maytag repairman. Unfortunately a few years later one of our CH-47D (Chinook) helicopters was downed in Afghanistan by an RPG (Rifle Propelled Grenade). A lucky shot (your Brother would know it as a “golden BB”). A pilot and flight engineer that I knew were KIA. I now see KIA in print as Kia although the badge on my 2010 Forte is the original slightly stylized KIA with the “A” being an inverted “V”.


#72

Sincere thanks for your service and condolences on losing your friends and brothers in arms. Thank God there are men and women) like yourself with the courage to fight for what’s right.

Your comments about KIA were interesting. I served during Vietnam, but until now I never noticed the connection. I’ll think of it, and of your friends (friends is such an inadequate term for someone you served in wartime with) now every time I see a KIA.

As regards the subject of the thread, I hope there’s enough information in this thread to counteract the original spammer’s intention. Serve’s him right IMHO. He shouldn’t be spamming car forums.


#73

I’d never be able to enjoy a leased car. Let’s see, I’m paying, paying, paying for this thing, I’m not allowed to drive it where I want, when I want, then I’ve gotta give it back, get hit with a bunch of hidden penalties, and start over again? I wouldn’t be able to sleep at night. I like to OWN my property (and everything on it).

Also, I detest the “system” telling me what I “ought” to be doing. Notice how they only ever advertise cars in terms of monthly lease payments anymore. And they advertise these leases relentlessly, kind of like how they advertise whole life insurance and reverse mortgages - RELENTLESSLY! Remember these people aren’t in business to give you the best deal, they’re in business to make as much money as possible. When something is being advertised so incessantly and relentlessly, they’re advertising the “product” that carries the highest profit margin for THEM. Of course they make it SOUND good, otherwise folks wouldn’t do it!

Many here state that a lease can make sense for someone who can write it off as a business expense, but I don’t even see how that works in most situations. Think about it, a professional like a real estate agent or sales rep is probably going to be driving far far far too many miles for a lease, and a tradesman like a plumber, carpenter, electrician is going to beat the snot out of a truck / utility vehicle as well as drive many many miles.

I suppose leasing can make sense under certain circumstances. If you don’t drive very many miles, you have plenty of disposable income, you want a new car every few years, you don’t want to be bothered by repairs (always driving a car under warranty), and you’re willing to pay the premium for doing so, I suppose a lease could make sense.

Personally, I feel that I work too too hard for my money to just hand it over to some finance company. Making that payment every month would irritate me like a seed caught between the teeth that won’t dislodge.

***Based on some of the advertisements I see . . . “Extra Super Ultra-Low Mileage Lease”. . . kind of puts a new twist on the old used car salesman line . . . "This car was owned by an old lady who only ever drove it to church on Sunday. . . " Under the terms of the lease, you may only be ALLOWED to drive the car to church, and ONLY on Sunday. . . :wink:


#74

common sense answer: I purchased my 2010 KIA Forte from a small local dealership. They were affiliated with a multiple brand (not in one location) dealer. They had no service department. When I asked about service, warranty, or recalls they answered “take it to our Mazda dealer” OK… Fortunately I had no problems. Two years ago they opened a new Kia dealership with a very good service department. Two out of three of the service writers (now consultants) are former Kia mechanics.


#75

I am in agreement with @“Ed Frugal” on leasing. However, I am not out to impress anyone with the vehicle I drive. I guess if having a,status vehicle is important and you can’t afford to buy one, then I suppose leasing is an,option, but changing your value system is a better option.


#76

Ed, the accounting for a lease is different for a business than it is for a purchase. A purchase needs to be considered a capital asset and depreciated over time. A lease is an operating expense, part of it’s cash flow, against which a business can get an operating capital loan. An operating expense comes directly off the company’s gross profit, purchase of a capital asset does not.

Businesses have an additional concern that a private purchaser doesn’t have, and that is the image of the business. New cars present a better image.


#77

Of course the dealers like leases. That keeps you rolling over all the time with a perpetual car payment until the day the funeral home plants you 6 feet down.

The dealer also knows that in most cases they’re going to get a lease return car that has low miles and is in great condition which will be reflected in the asking price on the used lot.
Even with no maintenance ever having been performed on the lease car the dealers will likely place the lease return on the lot as a CPO unit.


#78

Yeah agree. It can make sense for a business because you just write off the entire lease expense on an annual basis. If you buy, then you have to set up complicated depreciation schedules and keep track of all the expenses. Much cleaner for a lease.

Just adding everything up over the 36 month term, it comes out to about 50 cents a mile for the 10,000 miles a year. Then you have nothing at the end and no other options than to start over again. Avis is your friend and can probably do almost as well with them and change cars every month.


#79

Yeah, I get the part about a lease being an operating expense for a business. I was thinking in terms of, most folks who use a car or truck in the course of operating a business are going to drive WAAAAAY more miles than what a lease would allow; unless there are other types of leases offered to businesses that we generally don’t see advertised to the general public, which now that I think of it, is probably the case. If a business just wants a vehicle to park out in front of the business, they tend to go with something unusual and eye catching like an old hearse, or checker cab, or WWII era surplus vehicle, and paint it up all gaudy, you know, to catch the eye of passersby.

Sales reps / real estate agents I have either known or worked in the same company with over the years have said that 30k - 40k miles per year or even more is typical, I don’t see how a lease could be viable with that many miles being driven.


#80

Some who lease, offset the extra expense as part of a business.

Around me, most who lease, are leasing a car they can not normally afford and are just happy to drive a high end car and be seen in one. The problem is the lease payments on a Civic vs a 3 series BMW might not seem much ($200 vs $350). But if you ask them to pay 40 grand for the same car they are driving, they would say “no way”. They are paying more than the 40 grand over the few leases.