Why lease a car? | Imamother

Amarante

Sun, Jul 26 2015, 1:38 pm

kb wrote:

It's *easier* to lease. You don't have to do the research, worry about upkeep, etc. You don't even have to make up your mind about what type of car you want. But I'm pretty sure that you can finance a new car for about the same amount as a lease. (We bought used, so I don't know for sure)

I know that you are not recommending leasing but it actually isn't easier to lease than to purchase a car - at least if you are going to understand and try to get the best deal.

There are certain hidden costs in a lease - how much interest you are actually being charged? What is the depreciation rate and the residual value? What is mileage - what are penalties and what is the reputation for how they charge for minimal wear and tear terms of dings.

In my opinion, buying a car is much more straightforward. You decide what kind of car you need for your lifestyle and then research which car ranks high in terms of reliability - I used both edmunds.com and Consumer Reports. You can get information on what the best price for your car is in your area - edmunds.com is helpful as let you know what the dealer cost is for the car and what is the least amount of profit that the dealer will accept to arrive at what you will pay for the car. The internet has made it MUCH easier to comparison shop.

Edmunds.com also has a great forum and I spent time on the forums so that I felt *armed* when I finally was ready to buy the car. The forum posters will let others know exactly how much they spent at dealers and will offer advice on how to get the best deals. They also know when the manufacturers are offering incentives so that it's easier to get better deals.

Also, if you intend to buy and keep your car for a long time, a great time to purchase is when the new cars are released because you can get a great deal on last year's new model which is new but has gone down in value and the dealers are anxious to get off the lot.

If you need a car loan, you research what the lowest rate will be before going to the car dealer. Auto dealers make a profit on car loans so often what they offer will not be the best loan you can get.

Run like heck if a dealer asks you how much you can afford to spend per month because they can give you low monthly payments that are a ripoff. All you want to keep in mind is how much you want to pay for the car - do not mix up car loan payments and/or trade in amounts.

And be VERY VERY cautious about the rip off add ons that are tremendous profit centers for dealers like extended warranties, under coats etc.

There are many excellent articles on the web on how to intelligently buy or even lease a car. Certainly you should not walk into any car dealer or lease agency without knowing exactly how they operate and make a profit and what all the terms mean.

The car dealers hated me. LOL

I just laughed when they asked what it would take to get me in the car today or how much I wanted to spend per month. LOL

amother

Goldenrod

Sun, Jul 26 2015, 7:02 pm

I have done both

I recently leased replacing a car I bought new 12 years ago.

Buying new meant spending more then $200 a month. I would say once the car hit seven years old problems started. Some issues it wasn't smart to repair because of the cost like the A/C so it was very difficult to use the car in the summer. Every few months it was another problem. I felt for four years I was just putting money into a car that was uncomfortable to use.

This time we leased, if the car is not to our liking we will just say by, by. The annoying thing about a lease is watching the mileage but we have another car that is used for commuting.

For me it was paying a lot every month for the first five years then a two year break in payments and then just putting money into a car that was not in good shape.

Laiya

Mon, Jul 27 2015, 11:27 am

Skimmed the thread so sorry if I'm repeating. We recently decided to lease a car. It makes the most financial sense for us.

We had a very old car that finally died. The annual cost of repairs on the old car averaged out to approximately, the monthly cost of leasing a new car, INCLUDING increased insurance costs.

That said, we were able to negotiate our monthly lease payments down, since the 2016 models are now coming out and dealerships are looking to unload 2015 models.

We can't afford a lump sum payment for a new car right now, and we hope to only need this car for a short time (like 1-3 years, due to job situations). So purchasing a car would make no sense at all.

Also, a car is something that loses value as soon as it's driven. Unlike, say, buying a house, where you can look at the outlay as an investment. If you want to re-sell the car, you will never get back what you put into it.

If you decide to purchase your leased car when the lease is up, the payments you've already put in are deducted.

Otoh, if you want to have a car that will last as long as possible, purchasing is probably more cost-effective in the long run.

In sum: It depends on your situation.