NFT: Buying or Leasing a car

You own it longer you will be paying for more repairs that you would not have otherwise. The most expensive repairs you likely won't be able to plan for so that can pose an issue. With a lease you have a certain payment per month so you can budget accordingly.

Unless you can write off the lease to a business paying forever and not ever buying anything doesn't seem a good deal. But that's me.

So, there is that as well.

Although used cars are pretty pricey right now. I'd target an off lease model that has a great reputation for reliability. I think also SUVs are off the charts right now in demand so Id look towards a car. A used Camry with 36000 miles should run forever. Especially if you are low miles/year.

got a new Jeep and chose to lease, here's why.

- 39 month lease has everything covered. Small amount down and a monthly payment in my budget.

- I calculated what it would cost to buy and with a 72 month term, same money down as the lease, i'd be paying about $7k in interest (so $7k over the price + taxes).

- Here's where it gets interesting. Leasing gets you the better sale price in many cases so for me, it knocked off $5k through the competitor leasing program. Now after $39 months the buyout is about $25k and adding on sales tax plus what I spent during the lease, I'd be well under what I would have paid if I bought it outright from the get go.

- Unless you can pay a huge chunk of the car in cash or can take advantage of a trade in, buying doesn't make much sense to me right now. Many other brands have different pricing, but I didn't see it at all with Jeeps.

- Leasing lets you see if you like it and, you might actually net out ahead. In this case I definitely will (outside of a major accident) as 3 year old Jeep Grand Cherokees at my trim level are going for almost as much as the discounted sale price that I just paid on my lease.

will save you a ton of money over leasing a new car every three years.

But you also don't get a new car every 3 years.

In comment 15484270 ron mexico said:

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will save you a ton of money over leasing a new car every three years. But you also don't get a new car every 3 years.

It definitely will. I think the middle option is best though depending on what the residual value is on a leased vehicle vs. what the going rate is for a comparable vehicle.

GMAN, when shopping my advice is to see what the incentives are on the vehicle you want and whether they apply to leasing only. If they do (like in my case above) you are getting a lot of flexibility since you can buy it if you like it after your lease ends.

You can get an extended warranty that covers major repairs. With Toyota, you can get that warranty anywhere in the state. I emailed several car dealers in the state, and some answered. I brought the best offer to my dealer. It was about half of what was going to be originally charged. So if you looking for predictable costs like a lease, that is an option.

In comment 15484386 SJGiant said:

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You can get an extended warranty that covers major repairs. With Toyota, you can get that warranty anywhere in the state. I emailed several car dealers in the state, and some answered. I brought the best offer to my dealer. It was about half of what was going to be originally charged. So if you looking for predictable costs like a lease, that is an option.

Extended warranties are almost always a bad bet. The average person spends far more in premiums than they save on repairs.

i'd actually planned to do it on my last car but ended up not liking it as much as the same model that id had on a prior lease. so instead turned it in early with credit against a new lease for a bigger car which i needed anyway.

already like the new one a lot more than the last one though so planning buy it out at the end of this lease when it will likely be under mileage and i'll know it has a clean bill of health.

As you said, it’s a terrible time to get a car. New, used, lease or buy. It’s a crappy time. Very few cars, very few incentives and used cars are way too expensive.

I sell over 200 cars a year and About 90% of my customers lease for all the reasons you mentioned. New car, no worries and new car every couple years. If you

That being said, until recently, very few people purchased leases at the end. It’s more prevalent now because of the times. Personally, if you like the car you have, that’s path I’d take as long as you purchase a strong, bumper to bumper warranty. Interest rates are super low and the price isn’t inflated because it’s set in your lease contract. It’s non-negotiable. Use a dealer for the process. It should be seamless.

In comment 15484476 Steve L said:

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As you said, it’s a terrible time to get a car. New, used, lease or buy. It’s a crappy time. Very few cars, very few incentives and used cars are way too expensive. I sell over 200 cars a year and About 90% of my customers lease for all the reasons you mentioned. New car, no worries and new car every couple years. If you That being said, until recently, very few people purchased leases at the end. It’s more prevalent now because of the times. Personally, if you like the car you have, that’s path I’d take as long as you purchase a strong, bumper to bumper warranty. Interest rates are super low and the price isn’t inflated because it’s set in your lease contract. It’s non-negotiable. Use a dealer for the process. It should be seamless.

Steve, don’t need details but has this been your best year ever selling cars?

In comment 15484437 Eric on Li said:

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i'd actually planned to do it on my last car but ended up not liking it as much as the same model that id had on a prior lease. so instead turned it in early with credit against a new lease for a bigger car which i needed anyway. already like the new one a lot more than the last one though so planning buy it out at the end of this lease when it will likely be under mileage and i'll know it has a clean bill of health.

I was really kinda shocked how the numbers played out. I'm not certain but I think the market has basically made it very attractive to lease instead of buy because the dealers want the inventory back and score twice on the same vehicle (not a new concept but the price surge pre-owned must make this just a clearly obvious move to make). When I priced out the purchase it was $5k more and they said Jeep is only incentivizing leases right now. No idea why they don't adjust that on the residual but it certainly works for me!

that is the most cost effective way to go. Even if you have a major repair 6 years later, it is still cheaper than having monthly payments.

I have done this many times. Most recently, my daughter's car which used to be my wife's car had a couple of repairs. They totalled about $1000. The car is a 2011 and has been paid off for 7 years. It is starting to pay me back even with this repair. That is 2-3 months of a car payment anyway.

The last truck I owned, I bought in Oct of 2002. Kept it 13 years and drove it 160k miles. When factoring the purchase price plus repairs, minus what I sold it for... the truck cost me $175 per month. MUCH cheaper than any lease.

I have a 2016 Tacoma Limited. Paid $39,500 out the door. I have owned it for 73 months and have had zero repairs. Not even brakes or tires. Only oil changes.

The dealer has called me to offer $33k for the truck. I am seeing similar values in Kelly Blue Book.

So, if I sold the truck today, it would have cost me $89 per month....for a fully loaded Tacoma.

Catastrophic engine and transmission failure doesn't happen too often anymore on cars under 100k miles. I think the fear of that (along with paying for brake work) is what drives most people to lease cars.

If you're responsible enough to change your oil regularly, and replace your your tires and brakes a couple times, then your car will last and you'll save a lot of money compared to if you leased.

In comment 15484538 UConn4523 said:

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In comment 15484437 Eric on Li said: Quote: i'd actually planned to do it on my last car but ended up not liking it as much as the same model that id had on a prior lease. so instead turned it in early with credit against a new lease for a bigger car which i needed anyway. already like the new one a lot more than the last one though so planning buy it out at the end of this lease when it will likely be under mileage and i'll know it has a clean bill of health. I was really kinda shocked how the numbers played out. I'm not certain but I think the market has basically made it very attractive to lease instead of buy because the dealers want the inventory back and score twice on the same vehicle (not a new concept but the price surge pre-owned must make this just a clearly obvious move to make). When I priced out the purchase it was $5k more and they said Jeep is only incentivizing leases right now. No idea why they don't adjust that on the residual but it certainly works for me!

they get you on both ends with the fees and presumably the used car market won't be like this forever, but right now I agree with you. i looked into the used market and it's just crazy to pay an 80-90% residual in some cases when you can get yourself a brand new car and lock in the option to buy out at a standard residual in the future.

In comment 15484497 Jim in Forest Hills said:

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In comment 15484476 Steve L said: Quote: As you said, it’s a terrible time to get a car. New, used, lease or buy. It’s a crappy time. Very few cars, very few incentives and used cars are way too expensive. I sell over 200 cars a year and About 90% of my customers lease for all the reasons you mentioned. New car, no worries and new car every couple years. If you That being said, until recently, very few people purchased leases at the end. It’s more prevalent now because of the times. Personally, if you like the car you have, that’s path I’d take as long as you purchase a strong, bumper to bumper warranty. Interest rates are super low and the price isn’t inflated because it’s set in your lease contract. It’s non-negotiable. Use a dealer for the process. It should be seamless. Steve, don’t need details but has this been your best year ever selling cars?

I was on pace to shatter my personal record. Then inventory disappeared in august or so. We have 40 sales people and usually 2000 new cars on site in inventory. We have 25 new cars to sell right now.