Post # 1
My hubby and I just found out we are expecting baby number 2 in March. (yay!) With all the changes we have to make, getting another car is a MUST. Actually getting an SUV is ideal. With two car seats and a double stroller I just can’t see anything else hauling us around. (I am just NOT the mini van kind. Its a weird phobia of mine)
Things are kind of tight and we are making our final payments on the car we have now. I’m very afraid to finance another car and have high payments again. We are thinking that we could affored payments around $350-$400 tops. (we REALLY dont want to pay over $380 if we dont have too) We thought leasing might be more affordable. Is it? Is getting financed for leasing easier then getting financed for buying?
P.s. Our credit score isnt the best right now due to Student Loans from college. How much will that affect us?
Post # 3
First off, Congratulations!!
I lease my car. I did it because I could not afford buying a new car (I was in college). I was a little hesitant on buying a used car so I went with leasing. I put down a $4000 deposit when I first got it. So now my monthly payments are less than normal. I pay $160 a month for a 2009 Subaru Impreza. This is not counting insurance. If you want an SUV you will obviously pay more. Although if I put down less than $4,000 obviously my payments would be more. I love it becuasue you get the joy of driving a new car and not paying the price. My lease is 36 months. The only bad thing about it is that you have to keep it 30,000 miles after three years. I drive a lot and so I know I will go over. If you do, it is 10 cents a mile. So when the time comes, I am going to really limit my driving. Under my plan I also have $1000 in warranty. after the 36 months are up i have the option to buy it or give it back to the dealership so they can sell it used. In a few years I know I will be able to afford it. In terms of your credit, I am not really sure. I am sorry I can’t help you with that one!
Post # 4
credit score will always affect your ability to get a loan for anything, and will also affect your interest rate. In general, leasing is more affordable than buying– which is why people do it.
The benefits of leasing are that it is generally cheaper and you can afford a newer/nicer car that you never have to worry about selling. Keep in mind that with leasing you will have a total mile limit and you’ll also have to ensure that the car comes back in a certain condition.
The benefit of buying is that the car is actually YOURS. You’re paying more but you’ll get something out of it: a car. You can pay the car off and then have a car for no monthly payment. You can drive it as much as you want and not worry about it. You can get scratches, dents, and dings, and not worry about it.
If you are confident that you can stick within the mile limit, you’re okay with the risk of having to return it in a certain condition, and you like always having a new car– leasing is a great way to go.
If you like overall value for your money, have unpredictable driving needs, and don’t care as much about having a new car, buying is for you.
**Note: If you lease and then decide to buy– you’re going to have to pay a lot more than if you’d just bought outright to start. My parents leased a car and had a totally unexpected circumstance pop up (my brother was hospitalized for 4 months and they had to drive to the hospital in the nearest city every day for 4 mo) and they WAY overshot their mile allotment. It was going to cost them so much to make up the miles they decided to buy but really ended up spending a lot more than if they’d just bought.
Post # 5
Congrats! Getting financed for leasing is more difficult than buying. When you lease a vehicle you have to factor in that yes you will have lower monthly payments, but you have to watch your mileage, wear and tear you are responsible for meaning that if there are dings, scratches, tears you have to pay for the repairs and usually that is at dealer pricing so pretty expensive. The pros are that if you lease a vehicle that offers a good lease program such as low money factors and residuals than you will have a very low monthly payment. I would also avoid leasing longer than 36 months or uneven months, because a 39 month lease will end right when you have to renew your tags. O! Insurance is also higher on lease, your coverage has to be 300 100 so higher monthly premiums.
I have always leased, and not until recently I decided to purchase a vehicle. In my opinion purchasing a vehicle is good if you intend on driving more than 12000 a year and keeping it longer than 3 years.
Hope this helps
Post # 6
I think it really depends on the type of car you get. If you get a good make car then it will last well after your payments are up and therefore you can have many years without a car payment. For example I have an Altima that will be paid off next year and will probably run for at least another 10. If I had leased I would always have a car payment.
I am actually looking into getting another car since FI has a massive work truck and we share the Altima alot and I have been looking at certified pre-owned Nissan Pathfinders. I want an SUV as well since I know that this will be the car I will have when I have kids. Since certified pre-owned are can only have 12k miles per year they are all under 40k miles. The payments would be around $350 a month if I only put a couple thousand down.
Like PP have mentioned be careful of leases since you can’t go over a certain number of miles. But if you want to be able to have a new car every three years then it’s easier when you lease.
Post # 7
If you lease:
You spend WAY more money on it overall. Your payments don’t go towards buying the car, its more like renting the car.
You can only drive so many miles per year. Wanna drive more? Its gonna cost you A LOT in fees.
Someone hits your car with a shopping cart & dents/scratches your car, you HAVE to fix it with a lease. If you own it, you can fix it if/ when you want.
Post # 8
I would definitely look into this more before making any decisions. We decided not to lease due to lack of putting money towards anything thats your’s + restrictions on miles.
Post # 9
I don’t know if this is a factor where you live, but in my area there are certain conditions that must be met when insuring a leased vehicle that are imposed by the dealership. Just make sure you check how much your insurance will go up on this vehicle if a matter of as little as $20 makes a huge difference in your budget.
Post # 10
So I took this amazing finance class in college that gave some really practical money tips. One of the only tips I remember (stated in many books, papers, and lectures from the class) is DON’T LEASE A CAR. In the long run it is actually a financially irresponsible decision because a leased car is a money pit (you pay a lot but end up with nothing) :/
The only time it is financially ok to lease is if you own a business because then it can be a tax write-off 😉
Post # 11
I’m personally very anti-lease, or as Dave Ramsey calls it, a “fleece.” That means they are just stealing money from you and it’s much more difficult to get out of if push comes to shove.
I highly recommend buying a late model used car. New cars lose so much value just buying driving them off the lot. When I bought my last car, I got a two year old car with all the bells and whistles, because it was a former lease. I still got a decent interest rate as well. If you con’t want to spend too much money, look at cars that are three to five years old. You don’t necessarily need a certified pre-owned car because the only good part about them is the included warranty. You can buy a separate warranty on any used car.
Also, do you really need an SUV? What about a station wagon or hatchback? These cars still allow you to store a lot in the back and fit two car seats in the backseat. Smaller SUVs tip so easily, I would be super wary of driving them, especially with two babies in the car. I absolutely adore my Toyota Matrix and I can fit SO much stuff in it.
Post # 12
I really would not lease a car. I would buy a great one and then use it for as many years as you can before getting a new one. Leasing ends up costing probably the same but you don’t have a car in the end that you don’t have to make payments on.
Post # 13
I leased an SUV (mitsubishi outlander) after college. I wasn’t sure where my life was headed so I just needed something for the short term. I took a 24 month lease which is hard to find and you pay a bit more for. By the time I did my deposit up front (I had a trade in plus some cash) and paid the 24 payments I was out almost $10,000 (I think actually closer to $12k). This was a very low cost lease too (my payments were only $275). At the end of the lease, I had nothing to show for it.
Based on the prices you mentioned, you figure you need to put at least $2k down (first payment, deposit, etc) plus 36 months of payments (assuming a three year lease). Assuming the $350 a month payments, thats almost $14,000 over three years!!!!
For our next vehicle, we decided to get something used. As long as it was under $10,000 and would last us at least 2 years, we would be better off. If you got something even a bit nicer that lasted three years you would be fine.
I would suggest looking for a used SUV (kids make a mess of cars anyways, no need for something new). If it lasts past two or three years then you have made your money back.
Post # 14
@SapphireSun: This is a really good point too. Basically you have to have the highest quality insurance on a lease vehicle.
Post # 15
Personally I would never lease unless I had the type of job that I could use it as a tax write off. It is just spending way too much money and getting nothing for it.
I also would never buy a new car because of how much the value goes down when you drive off the lot. You can get a very nice 2-4 year old car for a very good price.
I have owned 2 cars both used- My first car I had I bought for just under 7k and it lasted me 8 years and I prob only spend 1k with repairs the whole time I had it.
Post # 16
Eh… I don’t feel like everyone should be so down on leasing. As long as you understand the costs and benefits and make an informed decision… it can be right for some people. Yes you’re paying maybe $10,000 over 3 years for a car… but that same car would cost you probably 20-25 to buy. I am considering leasing a car right now because I think it makes sense for what I want. my car is dead/dying and is on its very last legs. It will probably completely crap out within the next few months. We just bought a house, have the wedding, etc etc etc. I don’t have the money to devote to a big down payment right now. But, my FI and I make enough that within 3 years we will be in an excellent financial position to make a big down payment. So I just need something in the interim. Something to get me from here to there. My choices are BUY a car that is really cheap/used that may have issues and i’d also be a little embarrassed to take clients in, or lease a car for 3 years that is nice and professional (I’m a lawyer— things like the car i drive my clients around in DO matter to my job). Yes I’m paying money out for 3 years that i won’t get back, but i’m basically just putting off making a decision on a car for 3 years until we’re financially ready to make a big down payment and a good investment.
I don’t really see why leasing is any worse than renting an apartment vs. buying.