Car leasing vs buying opinions wanted

I’m thinking of selling my 2011 Prius and using the money for new car leases over the next nine years. I know that car leasing got a deserved bad rap in the 90s, but I think dealers have been forced to clean up their act. I’m wondering if any Dopers have done, or routinely do this, and what the pitfalls may be.

I can’t really help, but I can offer my opinion. I have never leased because I don’t like the restrictions inherent in a lease, especially the mileage restriction.

Kiplinger has a "Should you lease?"quiz on their site. I have not taken it, but it may prove helpful.

Here is another lease vs buychecklist.

I’ve never leased a vehicle but I tend drive one until it dies, so it just doesn’t make sense for me.

I should perhaps add some information.

Mileage: my present car is three years old and has 10,000 miles on it. We take public transportation in the city for most things, with the occasional day trip to the coast or other places. We just don’t drive it that much, so mileage is not going to be a problem.

Ownership: I own the car. I have paid cash for my cars since 1998 and buy new about every 3-4 years, which means I end up with a cash outlay of 5-7K at each interval, plus I have to go through the hassle of selling the old car.

I’ll be 67 this year, and the reality is that I won’t be buying new cars for all that much longer, and want to simplify things. My understanding from talking to a sales guy the other day is that a lease on a similar car to mine would run about $5,000 for a three year lease, at which time I have the option of either buying the car or returning it to the dealer and leasing another new vehicle (in other words, I’m paying for the depreciation). They take the older car and sell it as a certified used car for maximum dollars. The money I can get for my present car would take me through three cycles of this, putting me at age 76, which seems a reasonable age to pause to consider whether or not I can or should still be driving.

The first 36-month lease I found for a Pruis was $239/mo with $2600 down.

The only difference between leasing and buying is that the payments are more front heavy for a lease.

The only time leasing might sort of make sense is if for whatever reason you simply must have a brand new car every three years or so. Hence the popularity of leasing among the vain individuals who drive luxury cars. Money-wise, lease terms are usually designed to work out to being about the same as if you bought a new car and traded it in three years down the road. You might be able to come out ahead buying a new car and then selling it yourself, or else of course keeping a car longer than three years will wind up being much, much cheaper.

Another part of the reason why leasing makes the most sense with luxury cars is that the depreciation is so steep on them that the first owner eats a huge amount of money in the first few years. But something like a Prius holds its value like crazy and so if that is what you’re thinking about leasing, I’d crunch the numbers very carefully-- you may be throwing away a HUGE amount of money doing a lease instead of buying and trading in.

One other thing-- seeing as how you’re in a city, have you looked at ZipCar or similar? Considering how little you drive, something like that might save you a significant amount of money over leasing.

That’s significantly more than the guy was suggesting. At a total cost of $10K ($8K+ $2600 for three years), it’s not worth it.

As for Zipcar: we drive very short distances, but they are frequent, so it would seem that a car like that would end up being more of a PITA than a convenience.

We leased a car once for a year before getting a loan from our credit union and buying it outright. Apart from the mileage limits, which don’t sound like they’ll make any difference for you, I didn’t like how high their insurance requirements were. They required us to carry more coverage than any bank loan ever did.

We now tend to own cars till they die, plus we live in the boonies which really piles on the miles. I’d never mess with a lease again, but they don’t make sense for us.

Oh, OK. That would make a difference. I commute 40 miles/day for work plus other things plus I like to take a long driving vacation every year, so a lease would just not be feasible for me.

Although I have slowed down, I don’t tend to keep a car ‘til the wheels fall off’ and trade quite often.

Leasing is a valid business option that makes sense for about zero percent of individual owners. Even in a “good” deal where the maker/seller is motivated to move the model, it’s something of a shell game to conceal the costs of buying under a sham of renting, with the obligations of both and the advantages of neither.

I have yet to see a full-explained case where leasing was a better option for an individual - except where it came down to the buyer preferring the limitations of the lease over the limitations of purchasing.

I’ve always been told to buy over lease, because when you lease all you ever have is a debt, it never becomes an asset. Whereas when you own, eventually you own it, and it still has value and is an asset, even if a diminishing with time one!

That argument falls apart with a wide band of purchases where the loan amount matches or exceeds the asset value. Lower-end cars bought at high-ish prices on long-term, higher interest loans are almost certain to be flat to upside down most of the term, with more paid out in total loan cost than any net value of the car. It’s a fixture and a common factor in the lower economic tiers getting screwed - you often have to have a car, and you have to take it on what terms you can get, and it becomes a “company store” burden.

But leasing is still worse for this tier.

Leasing is for people who like making car payments. Buying good used cars with cash is for people who don’t like making car payments.

Dealers often promote leasing over buying because they make more money that way.

If you think you might be moving to a different country, see what the lease says about it. I know some military people who were stationed overseas and were not allowed to that the car with them and, no, they did not have a way out of the lease.

And buying new cars on decent loan terms is for… Martians?

That was such a duh I didn’t think it needed saying. As always, the answer to “Why?” is “Money (ya fuggin’ ijjit!)” :smiley:

Even at $10K for a 3 year lease, it beats $25-30K for a new car every three years. Now, I could hang on to this Prius, which I think has a pretty good repair record over the years, but eventually it will need to be replaced. Since the market price will continue to go down, the outlay of money when the new car is required will be significant.

Repairs on a foreign-made car are fucking expensive. I just had to have the driver’s mirror replaced because some asshole knocked it off; the cost was just short of $500. I can’t imagine what it would cost if something major went wrong. I’ve gotten used to driving a car that’s under warranty over the last 15 years; it provides a certain amount of comfort knowing that I wouldn’t have to pay for something going wrong with the car. In the case of this car, the stereo display went apeshit about a year ago, showing hieroglyphics instead of station numbers, etc. The buttons quit doing what they were supposed to, as well. Toyota had to replace the entire unit. I would suspect that if I had to pay for that to be done again, it would be upwards of a couple thousand dollars.

Anyway, I appreciate the comments and will have to think about this some more.

But it doesn’t necessarily beat $25k for a new car and then selling or trading it for $20k (or so) 3 years down the line. That’s the point I was making earlier about how leasing can make sense for luxury cars, where your $60k BMW might only be worth $30k 3 years on, but new economy cars and run-of-the-mill stuff depreciate so slowly these days that unless the lease terms are very generous you’re probably losing money leasing. That’s doubly true with things like Hondas and Toyotas that really hold their value.

Nah, repairs on NEW cars are just expensive. Parts are still more expensive on European cars or oddball Asian ones, but for the most part Japanese and Domestic cars cost pretty much the same to fix these days.

Another scenario for leasing is what my in-laws did a couple years ago. Their old car had finally died, and leasing was the most affordable option right then (money was tight -and in fact we had to front the lease down payment for them). They were at the time 75 and 72, and who knows if they’ll even NEED a car in a couple more years.

Now, if they ARE still able to drive, they “lose” (sort of) because then they have to buy the car when the lease runs out. Of course in that case they’ve also won (by remaining healthy enough to drive)!!

For the OP: If you didn’t already own your car right now, the picture would be different - but why sell a perfectly good car on which you have no usage restrictions?

I was wondering that to. If you only put 10,000 miles on your car in 3 years, in 9 more years it’ll only have 40,000 miles on it. Most cars are good for about 100,000 miles before they need major repairs, and 200,000 before they’re no longer repairable. Even with a hybrid aren’t the batteries supposed to last 100,000 miles? If you hate what you’re driving now and want the cheapest way to get something else leasing makes sense, but otherwise there’s no way it makes financial sense. In 9 years a low mileage Prius is still going to be desirable on the used market.

No, the difference is that after two or three years you’ve paid $10k (or a great deal more - typically 50% of list) to rent a car. Unless you get thoroughly crappy loan terms, after three years you should substantially own the car.