Do you lease or finance?

cool_mama

Mon, Apr 27 2015, 9:36 pm

Why do you lease?
Why do you finance?

my dh would love to finance a minivan and I just don't see how we have the extra $700 a month. we have therapy to pay and a stupid credit card bill that somehow always becomes more instead of less.
he wants to finance because after 5 years it belongs to us and it can last for at least 10 years. I understand why he wants but money wise I'm the one that thinks straight.

so give me reasons why financing is better!!

amother

Dodgerblue

Mon, Apr 27 2015, 9:42 pm

We lease. Unless you're the type who really takes good care of your cars, I think leasing makes so much more sense. By the time you're done paying off the whole car, things start breaking and you have to keep putting in more and more money. Leased cars usually stay in good shape for two to three years and then it's already time for a new one! My father always bought his cars and after a few years constantly had to keep on giving them in to be fixed all the time. My brother in law just finishing paying off his car and just recently had to put $3000 into it because something broke. I'm sure people have good experiences with financing, and maybe they ultimately do save money if you calculate it out over long periods of time, but to me it just doesn't seem worth it.

TwinsMommy

Mon, Apr 27 2015, 9:51 pm

we do lease buyouts. the best of both worlds....

we lease it at the beginning so we get a brand new car for an affordable payment (used car payments are insane for what we were able to consider---- I wasn't comfy considering a car that had a lot of mileage).

Then, we buy a car we already know--- we know the previous owners, we know it has low mileage (we don't go anywhere- ha ha). When we finance a car that's a few years old that we've previously leased, we're able to get a much better deal than trying to buy a used car someone else owned that has such low mileage. I always want to keep payments under $300 a month)

Our 2001 saturn died in 2013 (after 2 road trips from Cleveland to Dallas and back) and our 99 Saturn (no road trips) is starting to die now-- it's in the shop now and I'm hoping to squeeze another year or two out of it. Smile

We just started leasing a 2013 Honda in 2013-- nothing wrong with it yet, and less than 9 thousand miles on it. Smile

mha3484

Mon, Apr 27 2015, 10:03 pm

We finance a used Volvo. The payments are more affordable than leasing a new one and the down payment was the same. We chose a car that is known to get over the 100k mark as we don't plan on a new car anytime soon. I don't like the idea of milage limits as well as being forced to fix all dents/scratches etc so it's perfect when you give it back.

SS6099

Mon, Apr 27 2015, 10:26 pm

We lease. I like to know what my total monthly expenses are. Period. And it's tax deductible for DH since he uses it for work.
Many people finance cuz the. They get to keep the car. We have the option to purchase for ten grand when lease is up In a year but we'll probably lease another car again.

amother

Hotpink

Mon, Apr 27 2015, 10:33 pm

I have one lease and one finance. My finance isnt crazy...its actually cheaper than my leased car and its mine at the end. I think both have pros and cons. I like knowing that at least kne of my cars will be mine after I finish paying. Btw it was new when we got it.

amother

Lawngreen

Mon, Apr 27 2015, 10:40 pm

We finance. We had an 09 accord that we purchased new for 18,500. We sold for 12,500 after having driven it for 5 years and having paid it off. It cost us 6k over 5 years. We could not have leased for that cheap. We did put down 7 or 8k on the car to have affordable monthly payments. I took the 12500 and put it down on a minivan now that we needed one. I could have put it back on a new accord and have had lower monthly payments on a new car.
If you finance, buy a car that has a good depreciation rate...

amother

Cyan

Tue, Apr 28 2015, 12:25 pm

We finance. We bought a Honda Civic in 2010 for $15k - after 4 years of payments, with a year left before paying it off, we decided it was time for a minivan - we were able to trade it in for $10k (we had $3k left on the payments, so that netted up $7k towards the minivan). Because we had so much that came from the Civic, our minivan payments are about $250 a month (we bought a used minivan, but it was VERY low miles and has tons of options). Had we leased, we wouldn't have had any kind of down payment and our payments would have been MUCH higher. In general, I like my money going to us, rather than the car dealer. That's also why we own a home rather than rent.

Amarante

Tue, Apr 28 2015, 1:55 pm

Now I can pay cash for a car because I bought my first car and then when the payments stopped, I just started paying those to myself so I never had to borrow for the next cars.

I've always bought cars that were rated super reliable by CR - mostly Hondas and they lasted for more then 10 years on average with no significant maintenance issues other than the normal one would expect. I bought a more expensive car the last time (Infiniti) and it is still going strong since 2000. I hit certain stages of repair when I had to make a choice as to whether to invest $2000 or so but then I just compared what the new car would cost versus the cost of the repairs and I opted for the repairs. With a new car, it's not just the initial cost but I would have to pay significantly higher insurance as well as the sales tax.

IMO there is no economic reason for anyone to lease a car unless it's a true business 100% tax write off. If one likes cars and wants a new car on a regular basis - then no reason for a person not to indulge that but it's an indulgence and not one that is justified when one runs the numbers. It's never less expensive to lease a car even if the monthly payments are less because you are going to be renting a car for the rest of your life instead of having a period of time when you have no car payments - e.g. even if you finance the car for 3 or 4 years, at the end of that time, you still have a very reliable vehicle which is worth money.

asp40

Tue, Apr 28 2015, 2:06 pm

Financing is always the better option financially. Whenever I hear people say that they lease because they cannot afford to finance, I want to tell them, then you cannot afford that car. It is better to finance a used car than to lease a new one, because in the end you will own something.

We financed a used minivan 18 months ago and it was such a smart choice. I figure once we pay it off, we will still have a few years of it left. <y previous minivan lasted me over 10 years.

Maya

Tue, Apr 28 2015, 2:19 pm

All those claiming it's more economical to finance a used car, don't any of you have a lot of repair and maintenance expenses? I know our old car requires a significant amount of money for upkeep, while the only costs of a new leased car are inspections and oil changes.

amother

Cyan

Tue, Apr 28 2015, 2:21 pm

Maya wrote:

We financed a certified pre-owned, so it comes with the manufacturer's warranty, so no, we don't expect to have so many expenses for upkeep.

amother

Linen

Tue, Apr 28 2015, 2:28 pm

Maya wrote:

How old is your old car?

A well-maintained car should not have very substantial repair costs for a good many years. Sure, things happen. But thousands of dollars a year between years 3 and 7, for example? Shouldn't happen.

mha3484

Tue, Apr 28 2015, 2:38 pm

We decided that financing was better for us so we picked a car that was 5 years old and has an excellent ratio of miles to the age of the car. We had an inspection as well. The dealer also provided us with all of the maintenance records that showed it was very well taken care of.

The car we replaced was a 2002. I would agree with you if I was buying another car that was also 12 years old that it could easily need expensive repairs.

Amarante

Tue, Apr 28 2015, 2:43 pm

Iymnok wrote:

What's the insurance difference between leased, financed and used?

Collision insurance is based on the value of the car so as a car becomes older and less valuable, it becomes less expensive. And at a certain point, most people drop collision insurance because if the car was totaled or needed a lot of work because of an accident, they would buy a replacement.

The cost for collision is the same for leased or owned. The difference is that a person leasing cars will always be paying collision for the value of a newer more expensive car so insurance premiums will never go down.

Liability insurance is based on the driving record of the owners/drivers as well as other factors such as zip code. Zip code also determines how much collision will be to a great extent.