Buy or lease a new vehicle?

[Rich Engelhardt]

I'm not a big fan of leasing, however, it does have it's good points.

I'm looking at a new vehicle and I'm still up in the air over the buy/lease question.

No need to rehash the down side to leasing since I'm aware of all of the bad points.

I'm open to hearing any good points or from anyone that does lease and why they went that way.

However - if anyone had a last second change of heart and dropped the idea of a lease, I'd be open to hearing why.

[Jerome Stanek]

When I was working out of town we leased cars for my wife so she would have a reliable car with the kids. always had warranty on the and little maintenance on them. We ended up buying the last one out as it had very few miles on it and the buy out was way below book value.

[Kent A Bathurst]

I have always concluded, maybe incorrectly, that a lease wasn't for me.

Tend to rack up too many miles, so the high-mileage contract $$, or the over-mileage penalties, made it unworkable for me.

Plus - "Someone" in the household demolished a late-70's pristine Datsun 810 wagon, 4-speed, with 45k miles on it. She Who Must Not Be Named. Man - I LOVED that car - great handling, no oversteer, RWD, I was Mario-friggin-Andretti in that ride. Broke my heart.

Other than that, we have always been good for 250k +/-. With manual tranny - never had to rebuild a clutch. I don't have an urge to trade for new equipment, but I do buy pretty good stuff - Cry Once. German predominates the driveway these days. Now I am Alain Prost in a Beemer.

With my "run it into the ground" philosophy, the lease never penciled out.

Jerome, however, was in the perfect spot for a lease, IMO - given his circumstances, I would have jumped on a lease. Peace of mind, and take care of the family.

[Jim Matthews]

If you're leasing, you're paying the depreciation on a new vehicle.

I buy 5-10 years old, mileage matters more than age.
Drive them until they're tired.

Most leases are a $10,000 "rental" at the end of which, you have no equity.
http://usnews.rankingsandreviews.com/cars-trucks/best-car-deals/Car-Lease-Deals/

[Al Launier]

This may help http://auto.howstuffworks.com/buying-selling/how-to-lease-a-car.htm

[Pat Barry]

Why buy new when slightly used will do? OK, count me out of the buy used camp. Been there, done that. These days I don't want someone else problems. That said, I have never leased a vehicle. I always figured it for someone who is going to turn the vehicle over every couple three years, not hold on for long term. I am curoous about what people think though, because my 02 Trailblazer is very close to 200K and I am afraid she's given me about all she has. A new Chev Colorado truxk is going to be $32K minimum. Leasing might be attractive.

[Myk Rian]

Our last 3 Fords were purchased straight up new. They all lasted 10 years.
I've never been a fan of leasing.

[Ole Anderson]

Ok, so far most of you have an opinion as to why to buy a car and keep it for a long time. Not what the OP asked for. He wants new. In my life I have bought exactly one used car. A Pontiac J2000 years and years ago. When I buy, I generally keep them for at least six years and over 100k miles. Currently we have a 2009 Pontiac Vibe we bought and a 2012 GMC Acadia that is leased. Not counting the '84 Jeep. I have leased four times IIRC. If your car is all about being fresh and you don't drive a lot of miles, leasing makes sense. If you find a deal, typically the lease payment is way less than a monthly payment on a new car. For a lot of folks, the monthly payment rules. I bought out my previous lease, a 2002 GMC AWD Safari van and kept it for another 7 years.

Let's face it, leasing is all about having a fresh car that is always under warranty.

[Jim Becker]

Leasing can be a good option for someone wanting a new vehicle every few years with lower payments and also allows for more "upscale" features for a lower payment cost. Leases are not good options for folks who put on a lot of driving miles...that can get costly. I did lease a few vehicles a number of years ago, but moved back to purchase because I do rack up the miles at this point. (my 2012 Jeep Grand Cherokee Summit, purchased on 31 July 2012 already has almost 42K miles on it)

Educated lessees are careful to understand the money factor and residual calculation when they are negotiating a deal. Don't allow a dealer to sidestep that question. You have a right to know all of the information about how your lease payment is being calculated.

One rule of thumb...NEVER put a down payment on a lease. Negotiate your deal with little or no "down payment". That "down payment" is just a capital cost reduction...IE pre-payment of lease fees. The exception might be if you have a trade going in that is easier to trade rather than sell outright for some reason and that goes toward capital cost reduction like a down payment. Dealers always advertise and try to sell "low monthly cost" first and almost always that includes down payments. Don't go for that. Never lease a base trim level, either. If you are leasing, you want the trim level that has the best residual value at the end of the lease and that's almost always the top trim levels with the features that make the vehicle desirable to a future off-lease buyer.

[Jason Roehl]

This may help http://auto.howstuffworks.com/buying-selling/how-to-lease-a-car.htm

That's a pretty good link. What would be interesting, would be to see those costs carried further, such as if you buy new every 4, 5 or 6 years--how that compares to leasing a new car every 3 years. Without running the numbers, I suspect buying new every 5 years would be quite advantageous, monetarily, over leasing, for someone who drives average miles. There are many vehicles out there with 5 year warranties, so one could still stay under warranty.

But, I'm just a curious bystander in this one. I have never bought new, and I don't ever see myself doing so, short of a major financial windfall or huge boost in income. With kids and being a contractor, I'm hard on vehicles--I'd have a hard time bringing home a shiny, new, scratch-free vehicle. I'd be a basket case. And, even if I could afford new vehicles on a regular basis, cost-wise, it's hard to compete with buying a 3-year-old, low-mileage vehicle about every 5 years.

[Brian Elfert]

The main reason a lot of people I know lease is because they want a lower monthly payment on a late model car. A lease can be less expensive than the loan payment on a late model used car. I hate salespeople who only talk in monthly payments. Tell me what the price of the car is and we'll figure out how I will pay for it later.

I tend not to keep my vehicles a real long time because my vehicle needs change over time. I've always looked for late model used, but I have bought new for every vehicle except my first one and a pickup I bought. My 2012 Grand Caravan it was less expensive to buy new than to buy late model used. (I was only looking at 11 and 12 models due to changes starting in 11.) The model I bought was new, but essentially a base model. No power doors and power lift gate like most of the used models. (Still pretty well equipped for a base model. Better equipped than my 2000 base model.)

[David Weaver]

There's no great general rule of thumb with leasing unless you can calculate present values on your own without the dealer's assistance. Then, you can figure out what the numbers say for you.

When I was young, I remember the rule of thumb was that it was always a worse deal to lease. In 2000, I got out of college and I bought a car, and paid it off as fast as I could. It was a volkswagen jetta and it sucked!!

My work mate, who got out the same time I did, leased a blazer. It sucked, too. He bought it off the end of the lease, and no matter what assumptions we used (we are of a professional persuasion such that we calculate time value of money related stuff a lot) I couldn't figure that he had made a bad deal. He'd actually gotten a better deal for the blazer by making 6 years of payments (3 lease and 3 to buy at the end of the lease) than he would've if he'd have bought it new in 2000 (back then, the economy hadn't tanked and car prices were pretty strong - even GM...yeah, seems odd to refer to a time when GM prices were strong!!).

I don't know that much about the car business, but I can calculate the numbers in a general case. Whether you make a down payment or not, you have to be able to calculate the numbers to make your decision.

It used to be that people leased cars to buy a nicer car than they could make the payments on buying new, but I don't know if that's the case any longer. there also used to be a lot of skimpy bumper to bumper warranties, so if you bought a car, you might have bumper to bumper only 12 or 24 months, and a long powertrain warranty that never covered anything that actually breaks on a car in the first 100k miles. Now, people can get ridiculously long payment terms and have vehicles that they otherwise wouldn't have afforded under a 3 or 4 year loan.

Look at your situation, decide what you like to do, get a good estimate of the numbers for two comparable cases (put them up here if you'd like to and I'll do the calculations for you at a reasonable rate of interest) and I'll tell you the difference in present value of the various deals).

One thing that comes to mind, I bought two cars inadvertantly and sold both when they were 3 or 4 years old, the VW because it sucked, and the next car because I had kids and it didn't suit. I would've been money ahead to lease those two cars compared to what I actually got for them on trade. If you are going to buy new cars every 3 or 4 years, the dealer is going to try to eat your lunch on trade and you might be better off leasing. But run the numbers, the numbers don't lie when a general suggestion doesn't fit.

[Rich Engelhardt]

I do rack up the miles at this point. (my 2012 Jeep Grand Cherokee Summit, purchased on 31 July 2012 already has almost 42K miles on it)
When I was working, I racked up a ton of miles. In typical week, I'd put on close to 800 miles.
I'd usually run out of miles on my new car warranty the first year.

Now that I'm retired, it's more like 800 miles a month. This is one reason I'm considering a lease.

[Rich Engelhardt]

Well - I ended up buying instead of leasing.

Try as I might, I can't get around the mileage limitations of a lease. I'm pretty confident I can stick inside the 12 to 15k per year, but, my wife says it would drive her insane having that & the high extra mileage charges if you go over it - hanging over our heads for a couple/three years.

[George Bokros]

The mileage issue on leases is a double edge sword. If you go over the mileage based on
you have a hefty mileage penalty. If you drive less than the miles the lease cost is calculated you paid for depreciation that did not occur and you do not get any credit for turning in a vehicle that is worth more than the upfront calculated residual.

[glenn bradley]

At a point in my life where a vehicle was just a monthly expense like water and electricity, a lease really worked out. I always had a better car than I wanted to pay for, it was always under warranty and was always pretty new. Not sure of the rule of thumb today but, at the time if you wanted to keep the car more than a two or three years and drove the average expected mileage, buying made more sense. I actually came out ahead on leased vehicles because I would return them with such low mileage.

[Brian Elfert]

At a point in my life where a vehicle was just a monthly expense like water and electricity, a lease really worked out. I always had a better car than I wanted to pay for, it was always under warranty and was always pretty new. Not sure of the rule of thumb today but, at the time if you wanted to keep the car more than a two or three years and drove the average expected mileage, buying made more sense. I actually came out ahead on leased vehicles because I would return them with such low mileage.

Isn't the only way you come out ahead on a lease with low miles is if you buy the car and then sell it yourself?

I had a leased car once and I rented a car for a cross country trip to keep the miles off. The rental car was cheap enough I think it cost me less than driving my car.

[Rich Engelhardt]

I had a leased car once and I rented a car for a cross country trip to keep the miles off. The rental car was cheap enough I think it cost me less than driving my car.
W/out a doubt!
We had a trip to Florida planned a few weeks ago to celebrate my uncle Bob's 100th birthday.
The cheapest transportation down and back was for us to rent a compact car for a week and drive.
Just the difference in gas mileage between my van and the rental car would have paid for the week's rent.

[glenn bradley]

Isn't the only way you come out ahead on a lease with low miles is if you buy the car and then sell it yourself?

It may depend on the lease and I'm sure things have changed in the last 20 years but, I got a 15 cents per mile credit for everything under 15k per year.

[David Weaver]

it's good if you can get that (credit).

Last car I inadvertently sold early (due to marriage), I bought for 27.5k, drove it 25k miles in 4 years (started to take the bus which cut back the mileage) and got 13.5k in trade in on it, which was the mannheim price at the time, or roughly, less a small adjustment for minor body work and tires (which it needed). In four years, it cost me 14K, and edmunds valued the mileage below expected for average market value to be worth a $500 adjustment. It was a little more than 20K under middle of the road estimate, so it was only worth between 2 and 3 cents per mile to not drive it much according to their estimate.

I'd have been better off leasing.

Maybe someone who wanted to sell private party could recover a little more than that, but for what I did with the two cars I sold early, I'd have been money ahead to lease. Finally with the last two cars, that hasn't been the case.