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My pattern has been to buy a nearly new car that is extremely reliable (Honda, Toyota, Volvo) and drive it for years, ~200k.
Of course I should be paying cash for a car, but let's set that aside for these questions.
1. I could buy a car I could afford at the moment, with high miles, and plan to replace it in a couple of years when I have saved up for better.
2. I could get a loan for a newer used car, payments are higher than lease payments, but would plan to drive it for ~7-10 years.
3. I could "take advantage" of one of the lower payments on a lease program for cheaper and what I consider less reliable cars, but I figure even a Kia or Hyundai should last a couple of years. I could lease a new car and then get rid of it before any real mechanical problems are due (2 years or so).
Leasing can be a good idea in many cases. HOWEVER, it is not a good idea to lease a car you could not afford to purchase.
ALSO, it is not a good idea to buy a car you cannot afford. I, also, would stick to 1 since you are implying that the purchase of a new car would depend on future cashflows.
If you want a new car every 3 years or so, leasing is much less expensive in the long run vs getting a loan or even paying cash. The downside is you will always have a car payment. It's a good idea if you get a new car frequently but not really the most financially savvy way to spend your money.
Golfgal is correct. It makes the most sense to lease for folks in image-driven jobs where a new car is often used to shuttle around potential clients. If such employment is structured to allow for the deduction of business leases that gives more advantage to such a "replace it every three" kind of behavior.
That said I agree with the other posters that would encourage the OP to NOT use a lease to "get a car they could not otherwise afford" -- that will likely result in higher maintenance and insurance costs too.
There is really a huge range of options in the new car market. Hyundai has really turned the corner and makes vehicles with better than average reliability / longevity.
The various "certified pre owned" programs from the higher end lines tend to have really attractive prices on vehicles with low miles, long factory warranty and a good system for loaners / road side assistance.
If you need your car for a long commute / a job that requires travel by car to clients it probably makes sense to get something that will be as safe / reliable as possible but given your past pattern of going to 200K I sorta doubt that "image" is an issue so unless your employment / role has changed significantly I don't see leasing working in the OP's situation...
Option #1 is your best bet. I have a history of leasing vehicles, and even though it looks attractive due to the lower monthly payments, in the long run it's more expensive, plus it's almost as if you're locked into the trap of always leasing a new or late model vehicle and always having a car payment. Thankfully, I now drive a paid-off car that's reliable, and am no longer inclined to get into the leasing trap. To me, the best car payment is NONE.
I'm a both a car and efficiency nut and the only reason I would lease a car is if the brand was unreliable (VW, Audi, BMW, MB, MINI...basically anything european). I would want all maintenance included and I would want the option to rid myself from a money-pit if the car is unreliable after a few years.
I've never leased a car. I bought one car brand new and another one used (3 years old, 80K miles, and half off it's sticker price). I've driven a combined 280K miles on both cars and haven't had any problems. Before I buy a car, I do my research online and buy a shop manual to determine if I can work on the car myself or if I'm going to be dependent on a mechanic or the dealership. Again, I would only lease a car if I didn't have faith in the brand's reliability.
like i said earlier, i traded in the 2009 bmw i had bought 2-1/2 years later .
my wife wanted to go back to something with alot more room. although we got a nice amount on the trade in we would have done better had we leased and not bought it.
My pattern has been to buy a nearly new car that is extremely reliable (Honda, Toyota, Volvo) and drive it for years, ~200k.
Of course I should be paying cash for a car, but let's set that aside for these questions.
1. I could buy a car I could afford at the moment, with high miles, and plan to replace it in a couple of years when I have saved up for better.
2. I could get a loan for a newer used car, payments are higher than lease payments, but would plan to drive it for ~7-10 years.
3. I could "take advantage" of one of the lower payments on a lease program for cheaper and what I consider less reliable cars, but I figure even a Kia or Hyundai should last a couple of years. I could lease a new car and then get rid of it before any real mechanical problems are due (2 years or so).
Buy it and drive the thing until the wheels fall off. I had a Mazda for 10 years, another Mazda for 12, a Honda for 7, until my wife started driving it.
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