(Closed) NWR: Lease or Buy

posted 6 years ago in The Lounge
Post # 3
Member
2580 posts
Sugar bee
  • Wedding: November 1999

I think it depends on your situation, driving habits, and what type of car you want. How different would the payments be monthly if you leased vs. bought? How much money would you be spending overall in the long term? Do you see yourself driving this car for 5-10 years, or do you like to get new cars more often?

Both of our cars were totalled in a hailstorm and we ended up leasing two cars–we were able to put almost no money down, we make reasonable monthly payments, and we can get new cars in 3 years (or choose to buy if we want to). We both have super short commutes and have no problem sticking to 12,000 miles/year.

I also remember some of the dealers explaining how the residuals on certain cars are better than others, so some have great leasing deals and others don’t–we looked into the cars we liked and calculated the threshold of payments to make leasing or buying a better deal for the amount of time we saw ourselves driving these cars.

Post # 4
Member
4159 posts
Honey bee
  • Wedding: October 2011

I’ve never leased a car because I don’t think it’s worth it.  I like to keep my car for longer periods of time, and if you lease it, you pay for it and give it back…it seems like more of a waste of money to me.  I would also go over the allotted km’s for sure and would end up paying way more. 

I should say I’ve only owned 2 cars – one my husband bought for me through a private sale, and my new one we’re financing it from the dealership.

Post # 5
Member
646 posts
Busy bee
  • Wedding: November 2011

We are on our third lease.  It really works for us because we don’t drive long distances.  Plus, with a lease there is very little maintenance and you get a brand new car.  The last lease we got included oil changes for 2 years, which I thought was great!

You have to negotiate the pricing though.  The required down payments are always extremely high.  I always go for zero to $500 for a down payment.  

You also should watch for leasing and financing deals.  September is usually the best month to lease.     

Post # 6
Member
10367 posts
Sugar Beekeeper
  • Wedding: September 2010

If your “old” car is barely 3 years old, why are you buying a new one?

Leasing is rarely the best financial option. Run the numbers – see what loans you get approved for before going into the dealership, email around and see who will give you the best deal on the car you want. We did this for our new car this year, and got a really, really excellent price. Leasing couldn’t touch it!

Post # 7
Member
3770 posts
Honey bee
  • Wedding: August 2013 - Brookfield Zoo

Why did you get rid of your old car?  If you go through new cars within the span of 3 or 4 years, I think leasing might be a better option (not knowing how the finances compare in the end).  If you plan to get a new car and keep it for longer than a couple of years, I would definitely buy.

Post # 8
Member
664 posts
Busy bee
  • Wedding: December 2012

Leasing depends a lot on your driving habits.  If you can drive less than 15k miles per year, go with the leasing.  Both BMW and MB are great cars to lease because they hold their value, therefore the residual % (how much the car will be worth at the end of 3-4 years) is really high (which is good b/c that makes the payments lower).

@Mrs. Chai:  I am right there with you!  I am currently leasing my car and it works out very well for me. 

Post # 9
Member
458 posts
Helper bee
  • Wedding: July 2011

If your old car was paid in full, then why not do that again? I’m a big believer in paying cash for everything except a house.

Post # 10
Member
6015 posts
Bee Keeper
  • Wedding: March 2012

I don’t get leasing.  you make monthly payments and at the end you have to pay for any damage to the car and you walk away with nothing.  You don’t have a trade in….. I’m probably missing something …

Post # 11
Member
612 posts
Busy bee
  • Wedding: November 2013

I agree with all of the PP. It really does depend on your situation. Also remember that at the end of a lease you always have the option of buying out the car so you dont necessarily have to get rid of it. I work for a dealership so if you have any questions PM me and Id be glad to help 🙂

Post # 12
Member
2295 posts
Buzzing bee
  • Wedding: April 2013

BUY!!! Here’s what Dave Ramsey has to say.

You can click on play at the bottom of the page to listen to the whole call. His advice has served me incredibly well for 8+ years.

Post # 13
Member
6743 posts
Bee Keeper
  • Wedding: June 2014

Here’s how I calculate whether a lease is worth it or not.  I add up the down payment and the cost of the payments for the entire lease term.  Then, I calculate how much it would cost me to buy the car and how much I would get by selling the car in the same amount of time as the lease term (2 years? 3 years? I look up KBB and use that to determine how much that same car that is 2 or 3 years old is selling for and how much it was brand new).  If it’s about the same (sometimes it is sometime’s it’s WAY more to lease), then I say leasing is worth it. 

The difference is if you plan on buying and keeping a car for a really long time.  My first car I kept for 11 years.  After the first 3 years, there were no more payments.  But, some people want and have the financial means to switch cars out every 2-3 years.  If that’s you, then do my calculation above and see if it’s worth it to buy or to lease. 

Post # 14
Member
2407 posts
Buzzing bee

I think buying is the smarter option. At least that way you’ll have something to trade in if you like to get new cars every 3-4 years. Yes your monthly payments will be a bit higher but I hate the idea of not having anything to show for it at the end of your lease term. 

I am a person who keeps cars for a while so I definitely see the advantages in buying. My current car is 7.5 years old and still runs like new. I love not having a car payment. 

Post # 15
Member
612 posts
Busy bee
  • Wedding: November 2013

@futuremrsk18:  Be careful with KBB. Their estimated prices are WAY higher then what dealerships use. They go by GALVES, which tends to be on the lower end.

Post # 16
Member
646 posts
Busy bee
  • Wedding: November 2011

@amandasf:  I love leasing too!  I think with the right lifestyle it is the way to go!

 

@HisIrishPrincess:  A lot of dealerships offer damage “allowances” at the end of a lease.  Honda offered $1500 worth of damage that was covered.  Most of that can be negotiated too. 

You have to be careful of the fees that some dealerships or financers charge at the end of a lease when you are turning in the car.  Make sure you ask about any of those fees before you agree to anything!

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