Buy or Lease a Car

Visitor (not verified)
anonymous user
Registered: 12-31-1969
Buy or Lease a Car
5
Fri, 08-24-2012 - 8:23pm

I've never done this before. Is one method more expensive than the other? What are the other factors to consider?

iVillage Member
Registered: 03-15-2012
In reply to:
Fri, 08-24-2012 - 9:06pm

I think there are many factors when considering buying or leasing.  For me, I tend to buy vehicles that are a few years old (hence the major depreciaton factor has already happened) and two I tend to own my vehicle for 8+ years.  So I want to have the least amount of money leave my wallet when paying for transportation.  For me buying is always the better option.  In 2 - 3 years my payments will stop where as leasing. .they go on and on and on (people who lease tend to trade in for newer and keep leasing  but of course not everyone who leases does that).

The plus side of leasing versus loan payments is that the payments are usually lower so if you really NEED a car (and not everyone does) and cash flow is a concern that leasing just might be the better option.

I, myself have never agreed with people who argue you can deduct lease payments (if you are self employed) as the only reason it is a better option.  Bottom line for me is how much money is leaving my wallet.  Yes, with leasing you might get a bit more taxes back BUT does it make up for the difference in what you will pay out in the long run (leasing versus owning).  Of course each person has to look at their own individual situation and do what is right for them.

Pershaps others will have other some other points to ponder for you.

Sandra

iVillage Member
Registered: 05-08-2006
Sat, 08-25-2012 - 6:15am
I think leasing is only a good option if you think you HAVE to have a new car every two years. Otherwise, I think it is a racket. Yes theupfront costs are lower, but there are usually mileage limitations that can cost you big at the end. If you can get a reliable used car, then that is a great option. Then the trick is to pay off the loan as quickly as you can, and then to have a 'car account' that you keep paying into after the loan is paid. Then when the car reaches the time in its life when it needs repairs, you have money set aside, and when it is time for the next car, you have cash...and even if the dealer is offering zero interest, sometimes they will offer you a lower price to pay cash...so it is always worth having the money in the bank...also, make sure you pay for only things you really need...you might need air conditioning, but unless you live in Alaska, you don't need heated seats...until you can pay cash for a car, I don't think you should finance luxuries...
Community Leader
Registered: 03-17-2003
In reply to:
Sun, 08-26-2012 - 3:33pm

Hi kerrybee.

I have leased cars and purchased cars.  There are benefits to both.  The two posts above mine address the major pro and con considerations to leasing and purchasing.  If you are looking at the total out-of-pocket cost to get into a new vehicle then leasing will be attractive, but if you put on more miles than what the contract allows, you will be paying for those miles in extra fees when the time comes to turn in the car.  That penalty alone can wipe out any savings that makes leasing attractive to begin with.   Of course when you purchase a vehicle there are no such penalties for the amount of miles you put on the car.

Was there something about leasing that perked your interest?  I know the TV advertisements for new cars and the low monthly payments are intriguing.

Carolyn

 

 

Community Leader
Registered: 03-17-2003
Tue, 08-28-2012 - 11:31am

Sounds like a good choice.  I'm impressed with the effort you put into exploring options!

Carolyn