Leasing is cheaper than owning!


#1

I was brainwashed into thinking leasing is for poor people who can’t save and live paycheck to paycheck.
Boy, how the times have changed.
If you don’t drive a lot of miles, leasing is cheaper.
Leasing is making more and more sense.

Since Honda’s barely depreciate, leasing is dirt cheap.

You can find a lease for $99/mo, and zero down, for 36 months.
You think you can beat that with ANY car you buy outright?
$1200/year to drive a brand new car, in perpetuity

Even at $150/mo, that’s $1800 a year to drive a brand new car.
You can spend that in 1 year on a klunker’s repairs. Easy.
EVERY repair on a klunker car and it’s $500 a pop.

You will spend less leasing a brand new car for life,
than owning a beater that looks like crap,
and is always needing something.

Unless you own a car you “love”, leasing for the win…
It’s more reliable, cheaper to own (no repairs) and you drive a modern new car with modern features.

If I ever drive an econobox again, it will be leased.
But, if you drive over 15k miles a year, you’re stuck owning.
($20,000 cash gone, plus $1200 a year in repairs once it’s a few years old)

People vastly understate the amount of money they spend on repairs.
With a lease, you’ll practically never even pay for fluids, brakes & tires again!

The PRO for leasing is that it’s cheaper. ($100-$150/mo, and nothing else)
Less than the cost of 2 repairs of a jalopy.
Paying for repairs on a jalopy is a very very expensive habit!

For people who want the cheapest cost per mile, leasing is now a no-brainer.

Car paid off ! So the next 5 years I’m driving a vehicle with ZERO payments.

Wrong, while your results may vary, most people driving a 5-10 year old car with 75k-150k in those years will be EASILY averaging over $1000/year in maint. and repairs.

So, yes, while there is no payment, you are now spending bigger money on repairs.
For the same money, you could keep driving a car that is never over 3 years/45k miles,
and never spend a dime on repairs. Driving a 5-10 year old car is a very expensive habit.

Much cheaper to lease that make your mechanic wealthy.

Oh, and bad tranny in that time frame?
BOOM, that’s 3 YEARS of lease payments in 1 shot.

$1200 a year after 70k miles is pretty conservative. Almost every repair costs $500-$600 after all is said and done (O2 sensors, Evap cannister, rotors/pads, etc) And, 2 repairs a year is pretty much standard in my experience.

Lease your vehicles, and you will make payments as long as you drive.

“BUY your vehicles, and you will make (huge) REPAIR payments as long as you drive.”

I have seen lease specials for $99/mo and $0 down.
I guess you need to shop around and/or wait for a sale.

For me, I LOVE to spend money on cars.
I even replace lots of parts that are working fine.
I might even get my perfectly working tranny rebuilt for $3000… just because!

BUT, IF I wanted to minimize the amount of money spent,
then leasing @ $99/mo with $0 down is the cheapest way to go.

It is literally more expensive to own a jalopy at $500/pop per repair.
If you DIY, clearly the math changes,

But, for people who actually want to save money, if you can do math, you can see that $1200/year (with $0 repairs) is the CHEAPEST way to drive a car, period.

18-month lease for 2012 Infiniti G37x nav $0 down $259/month

For those who don’t put on a lot of miles, You can lease a loaded G37 for 5k total over 18 months.
Do two of those back to back, and that is 36 months.

Roll it over, in perpetuity, and you’re paying $259/month ($3000 a year) to drive a perpetually brand new sports car, and never make a single repair. In contrast, you can easily spend $3000 a year to drive a rusted out 1998 Camry.


#2

I would agree leasing is better for some people, There are many benefits to it, many drawbacks. I seen my parents dump several thousand dollars into a 1993 corsica one year, followed by 1000 the next, followed by 700 the next. They would have been better off leasing a car. They finally dumped the car last spring for 400 bucks. So glad its gone, it was a junker.

They say you are always paying on a car, saving for a car or repairing a car.


#3

Got to be some caveats to this,but some companies stopped leasing for awhile when their new sales fell off,I guess its possible and there are a few I would like to try,leasing seems like borrowing to me and even hate to borrow a library book-Kevin


#4

However, it all depends on your driving needs. I drive as much as 25,000 miles a year. End-of-lease mileage penalties would eat me alive. However, it is always best to do the math. For some, leasing would be the cheaper option. Just not for all.


#5

But that paid off clunker is cheaper to insure, because you can buy the cheapo insurance

Not so with a leased (or financed) car

Personally, I buy all my cars for cash

I don’t like the idea of driving a car that I don’t own outright

If I lose my job, or become disabled, nobody can take away my car for missed payments

Let’s not forget that the average American drives a lot of miles every year . . . more than most lease agreements will allow. Where I live, MANY people drive an hour or more to work, each way. So leasing is out of the question for them.


#6

My problem with leasing is that it’s like renting a home: can’t do as you wish with your property, gotta worry about the lessor’s/landlord’s opinion, etc. (Also, as a guy who likes to “wrench,” I’d worry that I’d give the lessor any excuse to take exception to my work.)

It’s certainly liberating owning a beater…in my case, a 20y.o. truck with no “classic” pretensions. I saw a door ding this morning…probably while I was out scrapping…shrugged my shoulders and thought, “hey, there goes some character!”

That leasing arrangement you quoted does sound pretty enticing, though.


#7

This is an old and often repeated topic. I’m surprised to be reliving it.


#8
The PRO for leasing is that it's cheaper. ($100-$150/mo, and nothing else) Less than the cost of 2 repairs of a jalopy.

So you’re one of those people who lease and NEVER do any maintenance??? Not even oil changes??

Car paid off ! So the next 5 years I'm driving a vehicle with ZERO payments.

Wrong, while your results may vary, most people driving a 5-10 year old car with 75k-150k in those years will be EASILY averaging over $1000/year in maint. and repairs

Where did you pull that stat out of? Please show me the data? I don’t believe it one bit. We don’t even come close to $1000/year in maintenance and repairs. NOT EVEN CLOSE. Wifes Lexus has over 130k miles…and my 4runner has over 240k miles. I just bought new tires this year…and that was only $600. Tires are my biggest expense I have on every vehicle I’ve bought in the last 25 years.

It's more reliable, cheaper to own (no repairs) and you drive a modern new car with modern features.

Maybe if you bought more reliable vehicles you wouldn’t that problem. Sorry…but your math doesn’t add up.

This is an old argument you keep loosing.


#9

@Whitey: Yeah, this is “yesterday’s meatloaf,” to be sure, but I’m in the mood for leftovers right now, so no harm in a little civilized debate, no?


#10

I used to be lease no way, a guarantee of monthly lifetime payments. Our next car may be a lease as can average 10k annual miles on 1 car if needed. It made financial sense to me to pay for 5 years drive it for ten plus years or whatever until repairs deem a new car.

We rolled the purchase price into a Home Equity line of credit, guestimate 30k cost. 10 years brings that to $250 a month for 10 years, The payoff if it lasts another 5 years is 160 per month. Chances it will make it another 5 I do not know

Mileage is the big factor to consider when leasing.


#11

Sometimes the lease/own argument has nothing to do with cheaper but more with cashflow and assets and liabilities.

If your primary goal is to have reliable transportation at a minimum of cost out of your pocket then owning will almost always be the way to go. Buy a decent car, maintain it well, keep it for 10+ years and in the long run, you’ll be money ahead.

But lets say you buy a car, instantly you’re either out $30,000 or $30,000 in debt. But lease a car for say, 2 years at $300/month, you’re only committed to $7200. What looks better on paper, a $7200 liability or $30,000? You look better on paper and probably have less going to a lease payment than you would on a car note. At the end of the lease, buy it for the residual or lease something else and start all over.

There are some people who are at the opposite end of things…they don’t like being in debt but want to drive new cars. When I was a boy my dad had a friend who would keep his cars a year, maybe 2, before trading in on something newer. My dad joked he bought a new car whenever the ash tray was full. I have a few customers like that, they trade in the cars before the 60K service is due so they don’t have to spend money on an “old” car.


#12

I don’t think all of the math has been accounted for…

That Infiniti would be tough to take at 5 grand for 18 months with an allotment of 15k miles total; much less factoring in the registration, insurance,and so on.
Around here, the registration alone would probably run 1500 dollars; or more depending upon the MSRP.


#13

I have been thorn over this myself.

Always used to buy used with cash and drive them to the junkyard at the end. It made sense when the price of used cars fell like a meteor at 100K miles. Nowadays, at 100K miles they are still asking over $10K for most decent sedans.

The same inflated price on the used market forces one to keep full coverage insurance-perfect example being my '05 Camry at 100K miles still would cost me an arm an a leg to replace. The insurance on this Camry somehow is more expensive than insurance on a brand new one; I assume due to difference in safety features.

Also, the CA sales tax is 9%; when you buy a car for $20K, you pay $1800 on the spot. If you lease, you only pay 9% of the monthly payment as tax-no tax on the residual value.

My problems with leasing though are number of miles I put on (15K miles or more), hassle of going through finance/credit check etc (I otherwise pay cash and walk out), and also if I have minor dents and scratches, I am not into fixing them-but with leasing this is not “optional”.

Currently, I am in the market for a fun stick shift hatch and am seriously considering leasing, esp since I am not sure in 3 years my knees would still be good enough form driving stick in LA traffic.


#14

I’d jump at a $100/month lease cost, since that means the dealer is GIVING AWAY much of the car. ‘Real’ leases for Civics are $200-$250/month.

Unless there’s some huge $$ being thrown by the dealer/manufacturer at leases, they aren’t cheaper. If depreciation is low, like a Civic, that reduces the ownership cost exactly the same amount. A lease is paying for depreciation and interest, that doesn’t change.

A good car today won’t be a ‘heap’ in 10 years. Except if it’s abused.


#15
You can find a lease for $99/mo, and zero down, for 36 months.

Show me where this deal exists. I’ve been searching the internet…and the cheapest I’ve been able to find is $160/mo with 0 down.


#16

The fine print can put things into another universe. From the official Honda site pasted below and they show 159 per month with a lot of add-ons…
“See your Honda dealer…” translates into generating foot traffic onto the sales lot.

Closed end lease for 2013 Civic Sedan 5 Speed Automatic LX (FB2F5DEW) available from September 4, 2013 through November 4, 2013, to well-qualified lessees approved by Honda Financial Services. Not all lessees will qualify. Higher lease rates apply for lessees with lower credit ratings. MSRP $19,755.00 (includes destination, excludes tax, license, title, registration, documentation fees, options, insurance and the like). Actual net capitalized cost $16,675.53. Net capitalized cost includes $595 acquisition fee. Dealer contribution may vary and could affect actual lease payment. Total monthly payments $5,724.00. Option to purchase at lease end $11,655.45. Must take new retail delivery on vehicle from dealer stock by November 4, 2013. Lessee responsible for maintenance, excessive wear/tear and 15¢/mile over 12,000 miles/year for vehicles with MSRP less than $30,000, and 20¢/mile over 12,000 miles/year for vehicles with MSRP of $30,000 or more. See your Honda dealer for complete details.


#17

I’m too tired for a lengthy reponse. Just do the math yourself or pay the price. Don’t forget the turn-in costs, or the repairs and maintenance not covered by a warranty. I own my cars and have had little or no repair costs. Suit yourself though.


#18

“You can find a lease for $99/mo, and zero down, for 36 months.
You think you can beat that with ANY car you buy outright?
$1200/year to drive a brand new car, in perpetuity”

I’ve never seen a lease deal like this…


#19

If you buy a good “work horse” car like a old corolla, it will always beat the lease. Would you rather spend $10k every 2 years or just $3k in repair/maintenance every 2 years.

The only comparison where a lease shows benefit is when you got a crap car like a GMC Yukon etc. My friends corolla (poorly maintained) has spent less than $5k over 10 years and it is still running good…compared that with a lease every 2 years.


#20

It all depends, overall its best to buy used and pay cash, so long as its a car like the corolla. In my parents case it would have been better to lease a civic for 3 years than keep their corsica.

If you are prone to wrecks leasing is a good idea because if you total it, the lease is over and you get a new one.