QotD: Lease or Buy
Posted April 16th, 2005 @ 07:30pm by Erik J. Barzeski
Question: Do you lease or buy your cars?
My Answer: I buy, but those lease offers: $209/month, $2,195 down look awfully attractive. I know that you basically never stop paying and that there are certain restrictions, but I once read a book by a financial guy who said "if you only keep your cars for five years or so, leasing makes plenty of sense and offers a bit of piece of mind. Plus, there's often no penalty for getting a new car every two to three years." My family's always bought, and I probably will continue to do so, but leasing is something I'm going to explore in a few years.
You are encouraged to answer the Question of the Day for yourself in the comments or on your blog.
Donate Life
Posted 17 Apr 2005 at 8:54pm #
I've always bought but then first car was only CA$2000 and second CA$12500. In the second case we had inheritance money and flat out bought the car so we've never had to finance one.
When we get a new one it will be to keep for awhile so we'll buy it rather than lease.
Posted 17 Apr 2005 at 8:57pm #
Another note: Another case where leasing may make sense: If you put an enourmous number of miles on the vehicle in a short period of time or are very hard on a vehicle. If you wear a vehicle out in just a few years then a lease may pay for itself very quickly.
If you are an occasional driver who puts very few miles on nice roads buying may be more economical.
Posted 17 Apr 2005 at 9:26pm #
I drive 25-30k miles per year. Leasing wasn't even an option. Conventional leases allow for 12k miles per year. "High" mileage leases were available up to 16k miles per year.
Posted 17 Apr 2005 at 9:30pm #
Average mileage is supposed to be about 15,000/year, I believe.
Posted 17 Apr 2005 at 10:39pm #
Leases are typically for 10-15k miles/year, and of course higher mileage leases cost more.
You could consider what we have been considering - lease 1, buy 1. Buy her car, lease mine. Her car will be the "trip" car, and mine would be the around-town car. I'd hate to have two cars with auto tranniies, but she doesn't drive a manual transmission...
Also, about those "$2,195 down, $209/month," those are really $250-$300/month leases, depending on the duration of the lease (24-48 months). I personally would never consider a lease that required a down payment; the "down payment" is just a way for the leasing company to make the lease appear more attractive than it really is.
Posted 18 Apr 2005 at 1:31am #
2200 down 210 a month is attractive? But I put $2000 down and pay $313 a month on my first car out of college, which is fine by me. The only actual annoyance is that the warranty turns out to have only been 36000 miles, and after less than a year and a half I have to decide if I want to extend it.
Posted 18 Apr 2005 at 1:38pm #
I can't afford leasing, yet. Well, I could, but I'm stubborn. I love paying a vehicle off, and then trying to get 1-7 years out of it w/ no monthly payments.
Leasing would attract me more *if* there was no need for the $-down at signup. But there is, and I'll be damned if I'm going to give them a few thousand to rent their car, and pay them monthly for it, and then give it back in a few years.
Posted 18 Apr 2005 at 3:52pm #
I've never leased a car, but I've only had the one car.. my parents never leased cars though, so I've never really considered it.
Posted 18 Apr 2005 at 4:18pm #
Own.
I too like to buy a car and see how long I can keep it. I am really retentive and into taking care of my things which makes owning all the more attractive.
My brother is into leasing. He feels that he has an image to keep up, and having a new car every three years allows him to do that. Also, he is planning to be a lawyer soon, so he feels that his income will be higher in a few years than it is right now, which is basically low monthly income he gets working while at law school.
My parents did the owning thing for a long time, but now do the own one buy one plan. This is because my dad also likes to have a new car every few years.
For many professions (Real Estate, Law, Medicine?, Consulting, etc) projecting "an image of success" is seen to be necessary and valuable so that sort of defrays the cost of leasing for them, because it potentially brings in more business or a higher level of clientele.