Is it smarter to lease or buy? I noticed some people are snobby about leasing (car loan, SUV)

[Stonepa]

If you can't pay cash then you can't afford the car. Buy a used one for cash.

[Electrician4you]

Depends on your needs and financials.
For example my service truck were initially bought used (when I was first starting my business) but afterwards we were going always leased and negotiated the maintenance and mileage in the lease. It worked out for me because it was a fixed business expense and part of my overhead. It was also deductible and when I was done lots of times since I was very good in taking care of the trucks I could sell them for more than I owed on them. Most of the time other trade guys or even my guys could or would buy them. In those cases I inky wanted what the buyout was or I just returned them.

For personal vehicles I tend to buy them and keep them as there is no benefit to leasing other than if I wanted the latest greatest.
On our next car we're thinking about leasing a Volvo. My wife thinks she would like to lease something as she may not want to keep it. Since she rarely puts 5k a year on cars anymore we're looking at leasing. If she likes it we can buy it.
Purchasing cash or on loan is also a option.
I usually look at what I need at the time and what the best financial move is. Sometimes I buy cash sometimes on loan. I prefer cash purchases as it is something I budget for but it's not set in granite

[EastBoundandDownChick]

I bought my 2015 CR-V. I financed about half of it, over 5 years. Although, most months I double the payments. For me, it made sense because:

- the mileage was low
- Hondas keep good resale value
- it will last 200,000+ with proper maintenance, just like my other Hondas
- I don't drive it much
- having a new car every few years doesn't matter to me

It really depends on the person and their situation. To me, what's dumb is a long commute to work. That's where people lose a TON of money. All those miles add up quick, plus the cost of wear and tear, gas, etc. Not to mention time lost that could be spent making money.

Ditto for people who use their own cars for long trips. I've always used rentals when traveling long distances and I always come out ahead financially long-term.

[Katana49]

Originally Posted by SWFL_Native

I see a lot of E class lease returns not so many S class.

I bet 90% or more of them are the base E class, like an E250/E300.

[BirchBarlow]

Originally Posted by Pear Martini

I accompanied a friend to an Infiniti dealership recently and I noticed all of the sales people I spoke to were all about leasing and saying once you lease you never go back.

I own a non luxury vehicle and if I like it I will keep it long after it's paid off

I was able to pick up on this snobbish mentality of car leasing. One of the guys who worked there literally changed his demeanor and was looking down his nose telling us that everyone in his family leases and most of the cars he sells are leased.

This isn't the only time I have experienced lease snobbery. It's like some people think leasing is so much smarter and better than buying a depreciating asset... but I personally do not see it as a bad investment. I am not buying a car as an investment ...im buying it as an appliance like a piece of furniture or a washing machine...i don't expect it to keep its value but I expect it to give me use for several years. That isn't to say I see cars as just being appliances. I love driving and I love the feel of my car....i like having a car and the independence that comes with it. I like learning about different cars and car talk.

Have you experienced this leasing snob like behavior? Is leasing really the better and smarter thing to do?

There is some validity to that argument as it pertains to luxury makes. Purchasing a luxury vehicle like an Infiniti, BMW, Mercedes, etc. is financially imprudent unless you're so wealthy that it's a small fraction of your expenditures when you consider the cost of depreciation, maintenance, and insurance. It is true that the most pragmatic automobile to buy is a mid-range Honda or Toyota, but when it comes to automobiles, and many other things in life many people are neither pragmatic nor financially prudent. I imagine if one must drive a luxury vehicle it's probably cheaper to lease than own, but it's much cheaper to own a regular car than to lease a luxury car. So you are correct. Most of the people leasing luxury automobiles could never afford to buy one, and even to lease one they have to severely comprise their standard of living. But like I said some people aren't content to drive an automobile that gets them from here to there, they have to believe their automobile impresses others, i.e. it's a self-esteem issue, and it wouldn't matter if you showed them how much money they're frittering away on their luxury car, they just have to have it.

[alex_mercer]

I prefer buying a used car over leasing. Technically speaking, you own the car even though it has run quite a number of miles. Do an engine check, oil replacement, tire replacement (if necessary) and you're good to go!

[Johnhw2]

There are times and vehicles where leasing is a better deal than buying. Infiniti has used a strategy in the past to make a lease so attractive you would be wise not to buy and finance a car instead. Compare the cost of money to lease and buy/finance the vehicle. Leases quote a money factor, you multiple this by 24 to get the interest rate in the lease to compare to the interest rates to finance if that is the only other option you consider. Sometimes the lease financing is subsidized by the manufacturer, sometimes it not. When Infiniti was trying to get its branch accepted as a luxury brand, they pushed the end of lease residual value up above likely market values to make the lease so cheap people would give their vehicle a try. New manufacturers like Kia or Hyundai might do this to establish their luxury brand and get more of their product on the road. This decision by a manufacturer can make a lease more attractive than buying the vehicle although it can be a guess whether the residual is subsidized. The residual is usually quoted as a percent of the vehicles "cost" which is called capitalized cost in most leases.

So it depends is the correct answer. But it not only depends on your situation but also on the manufacturers strategy as well.

[17thAndK]

The definition of "smart" certainly varies in this case. But the word would definitely not apply to dealers "looking down their noses" at anyone.

[Vision67]

Although I personally buy used and keep the cars until they hit wear out mode, my neighbor, who is a Realtor, leases new Infinities every year. He also parks them outside because his garage is filled with worthless junk!

I'm sure there is a tax benefit to leasing for him, and I'll bet Infinity must have sweet deals. The guy is a wheeler/dealer so he must have found something.

Socially, we're complete opposites, so he rarely talks to me.

[BostonMike7]

I've never experienced the snobbery, and I've sat in a dealer and crunched the numbers on a lease a few times and came away saying it wasn't worth it (in my particular position) and never got any negative feedback. I did previously lease a benz, and purchased an Infiniti (kept this car 10 years and 200K miles...great car).


Actually, the times I've gotten some negative feedback are when I balked at the idea of a 72-month, $600-700+month car payment, and the salesman seemed to imply this was "normal" these days and they do it all the time. I was shocked.