Leasing VS Buying a car

Hatemywig

Wed, Aug 26 2015, 2:10 pm

I've been reading various websites with tips and comparisons. I need to decide whether leasing or taking a car loan better suits my budget. I would like to hear about your experiences so I can make an informed decision.

Can you share your leasing and/or car loan experiences?

Amarante

Wed, Aug 26 2015, 2:35 pm

This topic has been the subject of extensive discussion on several threads. Not that I am saying not to post but that much information on the previous threads might not be repeated again on your new thread. :-)

Do a search for lease and finance and the threads should show up. You might get better responses if you reactivate those threads.

amother

Aubergine

Wed, Aug 26 2015, 2:43 pm

the impression I got from a different thread is that the big question is how long will you keep the car. If you like driving a relatively new cars then it might be a better idea to lease then to keep buying new cars. if you plan on buying and driving it for as long as you can regardless of how old it is then its better to buy. We bought a car a few years ago and are almost done with our payments. We have no intention of selling it anytime soon. We just bought a minivan since we need two cars and again we took out a loan.

The interest rate is low enough that we felt it paid to take out a loan even though we could have afforded to pay for it outright.

I also don't like "borrowing" stuff- I don't like leasing, renting.... but that's a personal menuchas hanefesh consideration.

mha3484

Wed, Aug 26 2015, 2:57 pm

I know this varies state to state so I will preface that I am in Illinois.

We bought a 5 year old SUV this past spring. We chose a car that is known to get past 100k miles (volvo). We looked into both leasing and buying and decided on buying. In order to get the payment we wanted, we would have had to put the same amount of money down. Leasing we got a new car but owning we can sell the car at any point and get whatever we have paid off for it or trade it in for something else.

amother

Turquoise

Wed, Aug 26 2015, 3:10 pm

Our most recent car we leased because we were in the process of buying a house and couldn't afford to tie up a large amount of money for the car. If we didn't need the money for the down payment, we would have bought a car.
Next time, hopefully we will have more time, money and energy to buy or finance a 3 year old car.

mille

Wed, Aug 26 2015, 3:38 pm

We have two cars, we bought one and lease one. The one we bought, we had a decent amount of money to put down and great credit, so we have a very low APR on our loan. The monthly payments are similar to that of my lease, but we did put money down. We didn't want to be constrained by the mileage requirements of a lease at the time, because when we bought the car we were both using it, and traveling quite a bit.

The lease is very cheap, to be honest, and we put nothing down. The biggest reason we leased is because we don't know what kind of car we want "forever". We currently have no kids, but know in the future we will have kids, so will I want a little compact car when I have multiple car seats in the back? We presume that eventually we'll want a "family car" (maybe not a minivan, but a CRV or something?).

There's pros and cons of both. My family is very adamant that you should BUY your cars, and my in-laws are very adamant that leasing makes the most sense. My experience is that, budget-wise, they might be somewhat similar in terms of monthly payments, but after your warranty is up, all repairs are on you for a purchased car... On the other hand, for a leased car, you are charged for any physical damage at the end.

It's really a toss up... Sorry this probably isn't helpful!

cfriedman2

Wed, Aug 26 2015, 10:03 pm

when you lease your car you own nothing at the end of the 3 years. I would recommend buying a car thats about 3 years old and financing the payments. Whether they be over 3 years or 5 years. Cars now are built to last at least 10 years easily with proper mainatnce so after the car is paid off you will have a few years of no payments before you need to buy a new car again. If you are already in the mindset of making those payments then I would keep making payments into a seperate account and use that money for any repairs you have and if not when its time to buy a new car you will ahve a nice down payment saved up.

amother

Papaya

Thu, Aug 27 2015, 4:11 am

(Anon because I hate talking about anything related to money under my name)

I second the idea that it depends on how long you like to keep your cars. If you like the feeling of driving a new car every few years, lease lease lease. My parents felt adamantly that leasing was important for safety (I.e., always having a car that is 3 years old or less) - Don't know if I believe that, don't think I do, but just sharing a different POV.

You have to see buying a car as an investment. We recently bought one and put just over half down (about 10k). We still have monthly loan payments, though, that are comparable to having had leased (about $200 a month). It's a small compact car but we hope to keep it for a long time. We also do a lot, a lot of driving, including in and out of the NYC where scratches, bumps, dings, etc. happen. Keep that in mind if you live in Brooklyn and park on the street in Brooklyn (I don't, but I know many people here do!) We didn't want to have to worry about damage or mileage. We bought a good brand so that, fingers crossed, it will last a good 5-7 years, if not longer.

Don't forget though, you can always sell your car, just because you buy - you're not stuck with it forever. We considered getting a bigger car about 2 years into our loan because we thought we might have outgrown this one - we didn't go through with it but started calculating how much (if any) our loss would be.