What are the pros and cons of leasing a car versus buying? Which do you recommend?
When you lease, you will tend to have lower monthly payments compared to a standard car loan. When the lease is up, you can either turn in your car and lease another one, or you can buy the car for whatever they determine the price to be at the time. The biggest thing to watch out for on a lease is the mileage you put on the vehicle. For the duration of the lease, you have a limit on the amount of miles you can put on the car. If you go over that limit, then you have to pay for those extra miles when the lease is up. That can be added to the buy out price of the car if you choose to buy, but usually the buy out price is more than the blue book value, so it can be quite costly to buy the car when the lease expires, and if you don’t, you still have to pay for the miles which can still be costly.
Basically if you need lower payments and don’t plan on doing a lot of high mileage driving, a lease is good. Otherwise stay with a standard car loan.
Apparently I am on a roll tonight (answered two other posts) so I am feeling mighty opinionated, for me, anyway! 
My vote: Buy. Once you own it outright, there are no monthly payments. And, cars/trucks last far longer than we would be led to believe.
I have an eight year old truck. I had high payments for five years, but for the past three years, payments have been zero dollars. I will drive that damn thing till the wheels fall off. I am sure I can get at least another 6-10 years out of it. Of course, my ego is not tied into what I drive, so it is easy for me to say this.
In some cases, buying a vehicle outright and driving the same beast for over a decade is not for everyone. But, I am trying to see how long this truck will last just to find out.
Most financial experts I’ve read recommend leasing a car in only 2 circumstances:
- You don’t drive tons and tons (see: mileage limites), but do plan to replace your car every 2-3 years anyway, because you simply must have a brand new car all the time.
- You have a business/employment situation that would allow you to deduct the lease payments.
New American cars lose half of their resale value as soon as they leave the dealership. Japanese cars’ value doesn’t depreciate as quickly, and leasing is simply a waste of money. - if you lease a new camry or taurus it would be about $250 a month (before all sorts of dealer fees etc…) times 24 mos. = $6000. For about $12000 (depending where you live - (my car was 1000 dollars less in Maryland than it was in NY, same exact car!) you can buy a fine used American car. My brother just bought a one or two year old ( i forget) Impala for 10,000. Oh, and the leasing companies often require you to get more insurance coverage than you might want to get had you owned the car. Consider buying a one or two year old American car. Much better value for your moolah.
I agree with this assessment. When you lease, you’re really entering into a complex financial agreement where you essentially:
Buy the car outright
Use it for 3 years, with modest mileage
Sell it back to the dealership
All under the wraps of a single transaction, with a single monthly price that encompasses the purchase price, final resale value and interest cost. If this set of transactions is what you really want, leasing is nice because the finances are set at the start, and your initial/monthly payout is lower, though you have a risk if you go over mileage or damage the car.
If you buy, you pay more initially, but you don’t have as much back end risk since you can always keep the car, regardless of the mileage or cosmetic damage.
Mileage isn’t the only variable. Leasing companies also use “wear and tear” as a criterion. If you exceed normal wear and tear on the car, you’ll have to pay for it.
What defines normal wear and tear is pretty subjective, but if you’re in a bad accident, even if you have the car cosmetically repaired, it’s going to end up costing you.
It’s a rather unsexy option, but I would recommen buying an older Camry and spending your money on something other than transportation.
A trip to Tahiti is rather sexy, now that I think of it.
Only if you think topless beaches are sexy. 
I like to pay off cars and drive them as long as possible. My last car was a 98 Olds Cutlass. I bought it used, financed for 5 years and then drove it for another 3 years after it was paid for. Living without a car payment is nice! To me, leasing doesn’t make much sense because it seems like a set up for a perpetual car payment. During the lease, you pay almost as much as a car payment and at the end of the lease, you have nothing! At the end of my car payments, I owned a car (which I drove happily payment free until it was too costly to repair and then got 3K out of it for a trade-in).
Everyone knows, when you buy a car, not to pay full MSRP list (“sticker”) price.
Yet when they lease, they never question the fact that the capitalized cost for the lease is figured from the full MSRP price. So in essence, you “buy” the car for full sticker price, drive it for three years, and sell it back at a fair wholesale price.
Of course, if you actually BOUGHT it, you could do the same thing, except you’d know not to pay MSRP for that first transaction - right?
I was thinking of leasing but the mileage restrictions bothered me. I’ve put 15,000 to 20,000 miles a year on cars before, and part of the reason I wanted a new car was so I could drive anywhere without worrying about reliability.
I think topless beaches are sexy. That makes me sexy in my Camry, I suppose.
I’m too sexy for my Camry
too sexy for my Camry
much too sexy
This is an urban legend. When was the last time you saw a car (any car) with almost no mileage selling at half price?
The real loss on Day One is 10-15%.
I bought and drove my previous car for 10 years, then sold it to someone who’s still driving it (4 years and 8 months later). In the 6 years after I finished paying it, I deposited in a savings account the same amount as my car payment.
That money sent my son on trips to Europe twice, paid for a new roof to my house, and sundry expenses. When I bought my new car, I gave 20 000 Cdc cash downpayment. I finished paying the car, and I’m now putting the amount of my car payment aside for my next big project.
In my case, buying is the best option. BTW, the first car was a Mazda MX-6, this one is a Mazda6. And, even though it’s politically incorrect these days, I love my car.
My husband drives a lot for his business, so he leases.
Buy a Japanese car, pay it off for 5 years, drive it for free another 8, wash, rinse, repeat.
–FCOD
It hadn’t occurred to me until I saw this thread, but now that I have, I’d like to solicit opinions on a specific situation.
My wife and I recently moved across country and need a vehicle that is (really) good in winter weather, but a new one would push (if not exceed) our budgetary limits. Mostly, the vehicle will be used only in winter (to use the requisite 4/all wheel drive), but being able to haul stuff occasionally would be a plus. We’re not sure if we’ll be in this area for more than 2-3 years; if we move, it’ll most likely be someplace where a lighter use vehicle will be more suitable.
Note that I haven’t much looked into models or prices yet and so haven’t done the math; I just figured I might have a case where leasing makes sense. Anyone have any off-the-cuff opinions?
Couldn’t you use whatever car you are currently using 80% of the year and pick up an old Bronco or Toyota for the rest of the time? Shouldn’t be more than a few thousand I’d think.
Yeah, we could, sorta. The snow here doesn’t melt until mid-May, so that’s about 50% of the year. In addition, there are two things that complicate the situation: (1) the warranty and (2) wear and tear. See, for (1), our current car (a '92 Civic) is at the point where it needs periodic fixing; because of that, my wife wants a really solid warranty. For (2), we’re wary about buying used out here (a very rural area), as “normal” usage is much more demanding than elsewhere. Everyone we’ve mentioned it to has told us to look in Seattle (a 5 hour drive) if we go used, given the higher likelihood of lighter wear and tear.
In my mind, (1) is more important than (2), in that I’m all for a comprehensive warranty; it would also make my wife happy…which is a close second in importance to the safety issue of having a winter-hearty vehicle.
Exactly. Well, there’s a third- you want a certain car, and they have a super lease deal out. And you won’t drive it very much, *and *you want a new car after a few years.
Digital Stimulus- looks like what you want is a decent used Subaru Outback.