Is it better to lease a car? (mileage, buy, sell)

[calif]

Just throwing around the idea of getting a new car and was wondering if it is better to lease one? We usually replace our cars every 2-3 years.

[Deez Nuttz]

Well if you think of it on the aspect of when you lease a car, you're just paying for the depreciation value....

Do you typically get a new car every 2-3 years? Or used?

[calif]

We always get new.

[Donn2390]

In less you are in business and can write off the car, don't even consider leasong a car.

[Bummer]

Originally Posted by calif

Just throwing around the idea of getting a new car and was wondering if it is better to lease one? We usually replace our cars every 2-3 years.

Simple answer to this one, Calif . . . BUY, do not lease.

A CPA buddy has always told me the only (with a couple of exceptions) reason anyone leases is to be able to drive more vehicle than they can afford.

However, if you do decide to lease . . . the proper insurance is an absolutele necessity.

Good Luck.

[mufc1878]

if you switch your cars every 2-3 years, then it makes more sense to lease.

that said, i only lease cars that i could afford to buy if i wanted to.

i don't use my leases to 'stretch' for a car i can't afford. i use leases because it is more cost effective than buying and selling if you are rotating your personal fleet every 2-3 years. it allows me to experience all the great cars on the market depending on my mood.

[fjtee]

I'm in a lease and really regret it. While I really like my Honda, an "oops" baby came along and now we're stuck with the car. So, yes, the monthly payment is lower, but I can't get a car that will let me load all the kiddies and the dog. We almost moved overseas, too, and that would have sucked. So, our idea of giving leasing a whirl backfired on us. The next car will be a used one that we purchase. Just my two cents.

[texdav]

Leasig a car is only for those who can write off the lease really. Your paying a high price for appox 36000 miles of use.

[calif]

Well, I only drive my car approx. 10,000 a year maybe 11,000 tops, so the mileage is no problem. I'm just wondering if I could possibly get a lower payment by leasing? I feel that my payment now is a bit high, I pay close to $500 a month now.

[Sayantsi]

Leasing is a great option for those that want new cars frequently (you) and that drive normal miles. You basically pay only the depreciation on the car over the term, like three years, as opposed to paying off 50-75% of the car value over that same period by buying outright. Assume you bought the car and agreed to pay it off over three years - on a 30k car, that's 10k a year you need to pay, plus interest. If you lease and the residual value of the car after three years is 15k, you will only pay 5k a year - a considerable savings. If you buy a car, pay it off after 3 years, and then sell it, you've sunk 15k into a car than you need to get out again - leasing allows you to spend that money elsewhere.

The plus to leasing is you pay less pound for pound, its easy to swap cars when you're done, and you have no selling hassle. The down side is you're in a contract that can cost you money to break if you need to change vehicles, but if you were selling a 1 yr old car, you'd take a bath too. Contracts typically have mileage limits, where if you go over you pay 10-40 cents a mile, but terms can be higher if you let dealers get away with it.

Lease deals are generally not as good as they once were, and you have to be careful you get favorable details, like residual value, mileage, early termination clauses, etc. There are still good lease specials offered, like sales, at different times of year. Leases get bad reps because people misunderstand them, so make sure you read up on leasing and understand the rules of the game - its a great way to get a new car and minimize the hassle of selling every three years.

Of course, if you always bought cars just off lease (3 years old), you'd have excellently maintained cars with good mileage that have already taken the major initial depreciation - that would save you a lot more money even if you still changed cars every three years.