Why do you lease your minivan?

amother

Babypink

Sun, Feb 05 2017, 5:24 pm

I just did the math every which way because I need a new minivan and I couldn't find any justification financially to lease one. do you lease because everyone else does? you just want the newest model all the time? please enlighten me. maybe I'm missing something. my conclusion was to buy a van a couple of years old so it is in good mechanical shape and finance it. I plan to sell in 3 years and buy another.
I bH can afford to lease if I want to but I don't like to waste money.
your thoughts please?

amother

Salmon

Sun, Feb 05 2017, 6:02 pm

Financially it makes more sense. When you buy a car, you need to change tires once in 3 years, brakes once in 2-3 years. If it is a used car, you will have additional bigger repairs less often but more expensive. When you lease, the only thing you need to do is oil changes. By the time the car needs new tires, you're already trading it in. The cost of these repairs add up significantly. Never mind when you're buying an even older car which is at the mechanic more often than you get to drive it. Additionally, the unreliability of an old car is not worth it for people who rely on their cars daily to get to work/jobs and such. If it can break down any time, the headache of that (and the ensuing costs of towing and repairs) is worth to pay for.

DH financed a minivan. 3 months after he did so, he could have got the same exact minivan (from *that* year) for a cheaper amount than the monthly payments he's still making now 4 years down the line. He's hoping and praying the thing lasts at least until he finishes paying it off.

amother

Babypink

Sun, Feb 05 2017, 6:06 pm

amother wrote:

We purchased a used minivan. It lasted 6 years, but the last 3 years we had alot of issues with it and put in alot of money. We were at times car-less , which is very difficult where we live. My car is gone now, dont know if its sellable.

We are looking in leasing as apposed to buying. We cant afford to not have a car. Budgeting for car repairs is also very difficult.

I'm buying a 2 yr old car which is still under warranty and will sell in 3 years. a 5 year old sienna is still great condition when we will sell it.

amother

Crimson

Sun, Feb 05 2017, 6:08 pm

Dave Ramsey calls leasing "fleecing."
Watch some of his youtube videos about it.

Car loans are equally bad! Buy a cheap minivan (or if possible keep using your current one) and use what you would have spent on the monthly payment to save up and pay cash for a better one - or save by decreasing cleaning help, clothing, other luxuries etc. People who care about money only pay cash for cars, ideally. If you plan on buying something better in a few years, you definately want to go the cash route in the meantime. You could end up underwater for your loan if you sell it for less than you still owe the financing company!

amother

Babypink

Sun, Feb 05 2017, 6:09 pm

amother wrote:

my monthly payments will be half of a lease payment.

amother

Floralwhite

Sun, Feb 05 2017, 6:15 pm

To me buying an newer used car is an investment. I prefer to invest my money differently.

I purchased a used minivan with mileage and paid for it in cash. Take that amount and the amount we spent on repairs, it would have been worth it to lease.

We also had a small car for local use only. We had that car for over 10 years. It was a great investment.

Most people lease because they dont have the cash to buy used, or because they prefer not to tie up $20,000 cash into a car.

amother

Pumpkin

Sun, Feb 05 2017, 6:15 pm

amother wrote:

Claiming financially it makes more sense to lease is an interesting claim. If you're paying upfront (not financing), I don't see how that can be the case except for in rare occasions when you end up with a lemon. I've leased as well as bought (used) minivans and spent waaaaay more per year on the leased ones (including tire changes etc).

People lease over buying because they want newer models every few years (if they can afford it, sounds good to me)

amother

Salmon

Sun, Feb 05 2017, 6:25 pm

amother wrote:

WHOA! Such generalizations! I'm the amother you responded to.
#1 you say if you're paying upfront... Well, that's one of the answers to the OP. Not everyone can afford to pay upfront. Who has 18,000 to shell out? I can only afford to do monthly payments. The question is does that go into asset of my car, or not?

#2 Except in the rare occasions when you end up with a lemon... Well, that's another answer to the OP. Too many people have ended up in those not-so-rare occasions of having purchased an almost-lemon which turned into a lemon, and they don't want that anymore. Don't want to risk it whether financially or time-wise.

#3 spent waaaaay more per year on the leased ones ... Because you've spent more on the leased ones doesn't mean that everyone does. There are times of the year where you can lease for very very cheap.

#4 (including tire changes etc). Tire changes are one example of repairs that are constantly coming up when buying a used car.

#5 People lease over buying because they want newer models every few years - Not true for us, and for many other people I know.

amother

Babypink

Sun, Feb 05 2017, 6:40 pm

for anyone who claims financial sense for leasing please be specific. I have a good math brain and couldn't find the sense. unless you tell me that you would rather pay a lot more money just not to risk being bothered with any maintenance or repairs. that's not a financial decision. that's a luxury. explain the cons of buying a newish used car vs leasing. I want to hear a financial justification for leasing or it will confirm my suspicion that it's a luxury and an unnecessary expense to lease.

amother

Denim

Sun, Feb 05 2017, 7:18 pm

We lease and it's definitely not because we need the newest model every three years. We get the basic model and we always wait till there's a real blowout deal. We rolled in all other costs so didn't have to put any money down. We live month to month financially, and are able to pay a monthly charge but we're not able to put down a big sum of money to buy a van. (Same reason we're renting a house and not buying one)
And we've had used cars/vans in the past and always spent too much time and money by mechanics. You cannot compare the peace of mind when you have a leased vehicle to owning a used one. (Again, same as when renting a house)

amother

Pumpkin

Sun, Feb 05 2017, 7:21 pm

amother wrote:

Used Toyota Siennas and Honda Odysseys are expensive to maintain as they age?

I'm the person who claims to spend way less on used than leased car. I bought a used sienna about 10 years ago for $14k. That translates to a little over $1k/year (aside from repairs) but it is still going strong (so if I sold it now for $5k it would have cost me way less than $1k/year) and I spend very little on tires, repairs, etc.

My "very good deal" leased minivan was $250/month which is about $3k/year. I don't see how someone can buy a used sienna or Toyota and spend that amount per year. And I have many friends and families who own those, it has not been our (collective) experience. If you have a significantly cheaper lease than $250/month, nothing down, I'd be interested to hear that.

You can claim all you want that I am going by my own experience etc but Dave Ramsey (as mentioned here) and other financial advisors all say it's more expensive to lease. There are many great and perfectly valid reasons to lease (not wanting to risk repairs, wanting a newer model, whatever floats your boat) but it being financially advantageous is not one of them.

amother

Salmon

Sun, Feb 05 2017, 8:46 pm

amother wrote:

In your equation you calculated selling it now for 5k. Who says you will be able to? A car that old must have lots of miles on it. I don't think it's worth 5k.

Second, you say it comes out to a little over 1k/year. It's actually, to be precise, 1400/year. Not including repairs.

You spend very little on repairs, but with your math (of 1400 being a little over 1k), I'd want to hear exact numbers of how little those repairs were. Tires alone cost an average of 650-700 every three years so in 10 years, you've spent 2100 on tires alone. Divide that per year, comes out to another 210/year for a total of 1610/year.

Brakes need to be changed approximately every 4 years (depending on how much you drive). Brakes cost average 500. In 10 years you should have changed your brakes twice and half for a total of 1250. Divide that by 10 years = 125/year for a total of 1735/year.

And those are only two of the basics. Now maybe you had good luck, but on average, in a 10 year span of a car, you'll have to do a lot more from changing the belts to buying new wipers, changing the transmission fluid and putting new spark plugs. All of these things, besides for adding up financially, take up of your time, which to many people translates into money too (taking taxis while the car is being serviced, loss of work, etc.)

A good deal on a lease, at some point you could have gotten them for 220/month with no money down, comes out to about 2700/year with no additional costs of money or time.