Need New Car Pros and Cons Lease or Purchase

My hubby and I just had this discussion a few months ago. For us, it made more sense for us to go with the used route...just because we could pay it off quicker and would have something to show for at the end. For leasing--yes, we'd have a brand new car, but then nothing to show for all the money once the lease was up. It's just like renting a home over owning.

It would depend on how much driving you do. With a lease there are very strict rules on mileage, scratches, etc. They tack on 'excess' and 'damage' fines for these things.

Also, after the lease is up, you have nothing to really show for it.
Me, if I could afford the $280 a month, I would go the slightly used route. There is less worry about keeping the miles down and the car spotless.

DONT LEASE!!!!! DONT DO IT!!!!! I was stupid and did this some years back....unless you plan on getting a new car, every 3 years....dont go for a lease. I leased my car when I was single. I married, had a child and when that lease came to an end....I owed 9,000 and some change....yes, you can make payments on this 9,000 grand, however, they manage to stick it to ya with the interest. My husband had to write them a fat check that year!!!!
With a lease, you ar basically "renting" a car for life!!!

HTH,
M;)
P.S. My sister leased her car the same week I did, (yes, we were both crazy) she didnt make out well either...she went to trade her car in and then make payments and she received next to nothing for a down pymnt on the next car. Therefore, she is paying full price for the car she is currently driving...essentially, she racked up no equity in her lease car.

My personal feelings: at the end of paying for a lease, you don't own anything. So I've never been sure what the point is. Also there are the mileage limitations, etc.

However, 279/mo for 60 months sounds a little high for used. Are you sure there are no deals you can get on a new car? Right now there are probably lots of incentives on new cars because of the economy. We bought new a year ago, and got 0% for a 3 year loan, so while it hurts to pay it that quickly, because the payments are higher, in 2 more years we will own a fully paid-off, almost new car, and will have paid no interest. See what incentives there are on new cars in your area.

I have done both leased and bought, the question to ask yourself is how long do you see yourself owning the car? Before my last vehicle we usually got a new car every 3-4 years so we leased because you can turn them in at the end or trade in for a new one, where if we were to sell it might not hold value. My last car we bought because we are going to have it for the long haul. So ask yourself how long you see yourself driving this vehicle and what are your trade in options at end of lease or earlier. Also if you lease whay is your payoff if you want to buy that car at end of lease and is it going to worth less at that time.

Get Dave ramsays book or google his site. He recommends never leasing or purchasing a new car. He recmmends buying a good, slightly used car and paying cash if u can!

IMO, Don't lease ...it's like renting, you pay all that money and then you don't own anything in the end. Sounds like a waste of money to me.

Keep in mind you have to pay annual tax on a leased car, and have nothing to show for it at the end. Also if you go over on miles, it can cost thousands extra at the end, and they do not take payments for that.

I have never leased but know people who have and it was a major headache. Too many restrictions and too much money for something you do not own.

I have purchased two new cars in my short adult life and both have had low payments and I didn't put very much down. I bought Kia Rios both times. I have been satisfied with the warranty and the car. They are not the most stylish or any sort of status symbol, but they get us from point A to B, we own them and we have the warranty in case something would go wrong. I'm not sure on the size you want, but at the amount you are willing to put down, I'm sure you could find something new for a very good monthly payment if you look at something at a lower MSRP.

Good luck!

Since you do not have any debt, please keep it that way. Pay cash for a car. Don't ever, ever lease. A great book to read is The Total Money Make-Over by Dave Ramsey. This is the philosphy we live by. He also has a website and radio show with great advice. Don't go into debt for a car.

Lisa

I have never leased, but my husband has. I would much rather buy the car instead of leasing. AS the other poster stated they only allow so many miles within that 3 years. I know on my husbands lease it is ridiculous how much they will charge you when you turn the car back in with extra miles. He leased the car he has now as well, and he can only drive the car 1000 more miles for the next year. Granted, he has not been smart because he insists on driving the car when we go out town. I just feel it is waste to put all that money into something and have nothing to show for it. I know Dave Ramsey is dead set against leasing. He says it is one of the biggest rip offs at a dealership. I would highly reccommend the $279 per month for 60 months. If you cannot afford the $279 a month, then the car you want is out of your budget anyways.

Most of a car's value is lost in its first year. Buying a car even just 1 year used is probably the best route to go. You can still buy through a dealership, get a car in good condition with low miles and get a warranty.

I've never leased a car, but the company I worked for used to and I have a friend and a colleague who leased.

It's a good option for some people, but for the majority of us you want to stay away from a lease. When the lease is up, you turn in the car and then have nothing. When buying at least you have a tradein for your next vehicle.

Before leasing be sure to read the fine print very carefully and make sure you fully understand what your getting yourself into.

With the company they were leasing. Our accountants did some research and number crunching determined in the long run, the company would save a lot of money by buying new cars.

My girlfriend leased a car. There was a milage limit, and the fee was like 25 cents per mile over the limit. Four months before the lease was up, they were within 50 miles of the limit. The car sat in the driveway, with them making lease payments, insurance payments, and tax payments, on a car they weren't using. There was also some stipulation about them returning the car early.

My colleague was in an accident with her lease and although the car was repaired, she had to pay some type of fee because it wasn't considered normal wear and tear.

When purchasing a car, dealerships always want to talk to you in terms of monthly payments. This is my cue to turn and run in the opposite direction, of which I've done on numerous occassions. You need to look at the price of the vehicle and then consider your financing options. Consider, how much of a down payment do you want to make and where can you get the best financing deal.

Good luck.

Unless you are the type that likes a new car every 3 years, then buy one! By the way, leasing is not the best way to go, if your goal is to be economical. It's might cost you a little more in the beginning, but well worth it! We have two cars and no car payments!! Hooray! It's the greatest feeling. We paid them off very quickly (if you want to do this, make sure there is no pre-payment penalty clause in the contract). We haven't had a car payment for a few years and it's great. Our cars are 6 and 8 years old but they are still in great shape and we aren't going to be buying a new one anytime soon. Good luck.

I leased a Tahoe and boy was I ever glad to give it back. I was very close to going over the mileage and they stick your eyes with the money owed for mileage over. Plus, you pay all that money and don't get anything in return. It will never be yours unless you pay a substantial amount more when the lease is up and you will always have payments.

Your second option to own sounds better, but if you can pay it off sooner then that would be better. At least after 5 years or less you will own the car and not have any more payments. If you lease, after 3 years you will have to start all over again with payments. Plus a used car is definitely the way to go because a new car loses value as soon as you drive it off the lot. A used car has already gone through that loss and now you are paying what the car was probably worth in the first place. Just make sure the car is a certified car that has been through all the bells and whistles for inspections.

We are not fans of leasing. My hubby is on the road a lot and we spend about $800 a month on rental cars from Alamo, etc for his use. Short term, as on trips, etc, it is ok but they are so picky and you have to watch for specific clauses that you have to dig to find regarding extra charges.

It is by working with the short term leases for the last 25 yrs that we knew a long term could not work for us. We are not interested in a new car every 3 yrs or so, they are super picky on repairs, scratches, etc. It just was not worth it to us.

We tend to use our cars for a long time and don't trade often. Our cars have lower mileage because when hubby has a road trip, he rents a car vs wearing ours out.

Do check with dealers to see what is going on. There are tons of incentives out there. We also stay away from the loan programs unless it is an exceptional deal. We never carry a car loan more than 6 months.

Do you have a dealer you have a relationship with? We deal with Ewing Autohaus in Plano and we have a good relationship with our dealer. He knows our daughter will get my soon to be 4 yr old perfect car in Dec and I will be getting a new sport car so he has been on the lookout for my color, and everything on my "must have" list. He actually found my perfect car about 4 months ago but the timing was not right so we opted to wait and see if he can find another when timing was right.

Good luck whatever you do. I would purchase.

Leasing is a good option if you like to get new cars often. We've leased several cars. You build the mileage into your contract, but if you go over the miles, you do pay for the extra. In some cases, leasing and then purchasing the vehicle is a better option because you've already put the principle down and buy on the residual value. Depending on the car and how well it holds its value, you could either be in a good or a bad position.
Remember that most car companies update designs every 4-5 years, so car values go down when a new model is released. By putting that down payment on a lease, you will not see that money back.

Purchasing can be more expensive. I'd be sure to verify exactly what the warranty covers on a used vehicle.

After years and years of leasing, we've opted to purchase our last several vehicles because we've planned on having them for a long time. Hasn't worked out that way. But, the downpayment and principle become your equity immediately instead of the leasing company's.

Ask them to show you amoritization charts on different options (purchasing). You may find that a 60 month loan is great or that you can spend $20 more/month on a 3 year loan and save thousands of dollars in the long-run.

Good luck. There is no right or wrong answer. Leases are harder to qualify for these days because of the economy, but it sounds like you already have that covered.

If you are a Dave Ramsey listener you will never never lease a car, he recommends buying pre owned, I had a lease and it cost more than if you buy one. So I highly recommend buying!! Good Luck!

How critical is it now to get a new car? If you can go maybe 6 more months or longer, start SAVING that "supposed payment" even if you have to open a new savings account and make the payment!! At the end of 6 months, you will have another $1500 to add to the $3000 which will make a good down payment on your purchase. If you are debt free, maybe you can find even more money to put in that account and pay almost half the cost of the vehicle. Dealers will sometimes bargain if you make a larger down payment. And finance thru your own bank-not the dealer.
We are in the same boat and I'm making payments to myself until we face the next major repair (which knock on wood) my 2002 has not needed yet.