I’ll be getting a new car soon and for the first time I was thinking about maybe leasing. I have always bought in the past. My current car is over 100,000 and its time. I have always kept my cars well past what a lease would cover. The difference is now my life is in flux (divorce) and I’m thinking that maybe my situation will be more favorable in a few years. So I’m thinking I’ll lease a car for a few years then maybe get a better one then.
So what do you think? Whats better lease or buy? Just go ahead and give opinions from your own circumstances, no need to try and fit them to mine.
Some of the cheaper leases, while not the best deal in long term car ownership, can be good for people who aren’t knowledgeable about cars, have no back up rides in case of a car breakdown and wouldn’t be able to afford major repairs.
As long as you don’t drive long distances it might be right for you. Read the small print and figure out all the costs for the worst case scenario.
I have a friend who pays a little more than a cheap lease on a car loan on an over 5 year old car. By the time she pays it off she will need/ want a newer car so she’ll get another loan. I think she would be better off with one of the cheaper leases. She doesn’t have a lot of extra income so a car repair or major maintenance item is the end of the world for her. She also lives alone so she has no help getting to work if her car breaks.
Many car dealers push leases over sales. This makes me inclined to believe that as a general rule, leases benefit the dealers more than the buyers. In your particular circumstances, leasing might be the better option…but dealers do NOT put the buyers’ interests first.
How about buying a cheap beater with the intent of buying a decent car once you get things sorted?
And haven’t you deployed to Sandy Places a time or two and stand to do so again in the future? Why pay a shedload of money for something that may be sitting in your garage for 6 months?
Get something cheap that will get you from A to B. Then, once you’ve got yourself sorted out, you can buy your midlife-crisis car (mine will be a Nissan GTR )
I will never lease a car, and this is probably the main reason why.
I also refuse to have a car loan. If I can’t buy the car outright then I don’t buy it.
If I were the OP I would hang onto the existing car for now. Back in the 70s you didn’t want to keep a car for more than 100,000 miles because it was pretty much guaranteed to fall apart then. With a modern car, if you treat your car well you can usually get over 200,000 out of it with no problem.
I wouldn’t buy a beater unless there’s something seriously wrong with the existing car. There’s always a risk in buying a used car. Someone else got rid of it for a reason.
A friend of mine who is serving military has a Porsche and it spends most of its time sitting at his parents’. He’s been deployed - not necessarily out there - quite a few times.
I leased a 2003 Honda Civic and ended up buying the car at the end of the lease. It worked out for me because it kept my monthly payments now and I had money to save in the end. My lease payments went towards the cost of the car and it was a 4 year lease and I bought it in 2007 for around 7k when cars of the comparable make and year were still going for around 10k. The bad side of leasing is that you have to get full coverage insurance since the car isn’t outright yours, so that got a little expensive. Otherwise, leasing was a great option for me.
If you want to pay for use, rather than towards ownership;
As a deductible business expense – use valuable cash resources to grow the enterprise instead of tying it up in a depreciating asset;
As an expense against income for commissioned sales people;
To keep payments lower;
If you prefer new vehicles under warranty, leasing allows you to hand back the keys every few years and pick up the latest model;
If you need a lower down payment to get into a vehicle.
When leasing doesn’t make sense:
You drive a ton of miles every year;
You want to own the vehicle and expect to run it for 6 - 10+ years;
Older collectible vehicles registered in your personal name (ie not business related);
A personal-use only vehicle and you have cash to pay outright or can afford slightly finance higher payments to own it.
Whether you lease or finance a vehicle, and assuming you pay on time, your credit limit will likely set a new high, encouraging other lenders to increase credit availability on cards and lines of credit and ease future borrowing.
Leases are just another form of financing. You just are typically paying less upfront over a three year period. At the end of the lease period, you have the option of purchasing the car at the residual value (usually more than the fair value of the car). If you choose to not buy the car, you walk away, after paying any termination fees, over-milage fees, etc.
If you need more car than you can afford, leasing usually is a good option. Or if you are the type of person that is buying a new car every three years, then leasing may make sense for you. Just because you are getting a divorce shouldn’t impact your financing or car purchasing needs (unless you think you may need more car than you can really afford once the divorce is over).
Yes, except for ones covered under the vehicle warranty that’s usually still good for the lease period. People who can only afford to buy an older, out of warranty car, can sometimes drive a new under warranty car for a similar price.
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