To buy or to lease?

BusyBeeMommy

Wed, Mar 23 2011, 4:58 pm

We are going to be needing a minivan in a few months and I was wondering what the pros and cons are of both leasing and buying. I think it's better to buy a pre-owned vehicle with a warranty, because although we will have to finance, I am hoping to get something with a warranty on it and I feel like once the payments are up, we can keep the car. DH, on the other hand, thinks it's better to lease because if anything breaks or if you have any problems, you can go back to the company and they will take care of it for you, without you having to pay for the repairs (is that even accurate?). He feels like you have a set monthly payment that you make when leasing with no surprise expenses. He also likes the idea of getting a new car after every several years.

We don't drive long distance too often as we live in the same city as both sets of parents, however that might change and we might live 100 miles away within the next few years.

What are your thoughts and experiences?

mamommommy

Wed, Mar 23 2011, 5:25 pm

It seems like you already have a pretty good list of pros and cons. When you buy, all of your payments go towards equity in your car. It's not like a lease which is similar to renting (although you often do have an option to buy at the end of a lease in which case some of the money that you paid can go towards the purchase). After the payments are up, you own your car outright and have no payments on it at all. You can always continue to purchase extended warranties on your car which will hopefully offset some of the cost of repairs, and even if you do have a costly repair, it is usually less of an annual expense than making monthly payments on a lease.

The downside is that you basically have to deal with the fact that your purchase will significantly depreciate in value as the years go by (and it's at this point that it starts to cost you a lot of money in upkeep), until eventually it's almost worthless, and you have to buy all over again. It still makes sense to purchase if you're not the type of family that is very "tough" on your cars, thereby keeping its value higher and helping it last longer (making your investment much more worthwhile).

If you are the type of family that is tough on your cars, and are not good at maintaining it, then it might make more sense to lease if you anticipate having the money long-term and would like the perk of getting a new vehicle every few years. It is also a lot less pressure in terms of "worrying" about the car and possible problems.

amother

Wed, Mar 23 2011, 5:34 pm

You can lease cars I just leased a car 4 months ago. I am also needing a car and was deciding between leasing another one and buying used and possibly financing. I think I will buy used- that way its my car- no worrying abt miles, scratches or anything else. Also at the end of three years its still mine and I dont have to search for another one. I feel with the lease I am nervous abt every scratch and things. Also you have a certan number of miles and its annoying to not be able to drive it long distance etc.

amother

Wed, Mar 23 2011, 6:14 pm

Gm is no longer leasing vehicles. Its not a joke. Also lots of north american companies are slowing production on mini vans because appearently they are no longer popular Confused

As far as I know you can still get kias, toyotas and hondas in a mini van to lease.

Raisin

Wed, Mar 23 2011, 6:40 pm

We bought a 4 or 5 year old minivan (a seat alhambra if you are interested) about 3 years ago and have had very little problems with it.

leasing is a good option if you are planning to buy a brand new car. Buying a brand new car never really makes financial sense. Buy one a year or two old - it will be just as good and a fraction of the price.

If you are buying a used car check which ones hold up the best after several years.

BusyBeeMommy

Wed, Mar 23 2011, 6:50 pm

I thought you can lease cars that are not brand new either? I think my BIL just leased a 2010 Honda Oddysey.

I don't know, we have one car that we are pretty tough with now, little kids and all. I just had all four tires changed and payed $400 for it, and then the next month one of my tires became flat because of a screw I drove over so I had to pay another $80. My friend bought a used 2007 Toyota Sienna that looks great, but something happened with her air bag malfunctioning and she found out during inspection. They wouldn't pass it for inspection so she tried to get it replaced. Wouldn't you know it, you can only get it replaced by a certified Toyota repair place and they charged her $3,000 (!) to replace it. It's these stories that scare me. Are these things really common?

Does anyone know what the average lease price is for a minivan?

heffer569

Wed, Mar 23 2011, 6:52 pm

To the another who posted that gm is not leasing anymore you are mistaken I was at a gm dealership in the last 48 hrs test driving cars to lease and they are definitely leasing. Your lease may not be through gm financial but my Honda lease isn't through Honda it was through whomever the dealership got the cheapest lease through.

Barbara

Wed, Mar 23 2011, 7:17 pm

If you keep your car beyond the term of a loan, then it is generally cheaper to buy than to lease.

Things to consider:

(1) How many miles do you drive each year? Remember that there is a penalty for too many miles on a lease.

(2) How hard are you on the car? You will be expected to turn in the car in good condition. If you let your kids trash the inside of your car beyond what can be repaired with detailing, then leasing is not for you.

(3) How long do you keep your car? If you like getting a new car every 3 years, then leasing is for you. If you don't mind driving an older car (and I still feel guilty that I got rid of my last car before it was 20 years old), then buy.

nylon

Wed, Mar 23 2011, 7:52 pm

amother wrote:

Gm is no longer leasing vehicles. Its not a joke. Also lots of north american companies are slowing production on mini vans because appearently they are no longer popular Confused

As far as I know you can still get kias, toyotas and hondas in a mini van to lease.

According to what I just googled, GM stopped leasing in 2008 and resumed in 2009. The GM website has information on leasing and Google News has a bunch of hits for growth in GM leasing programs. Minivans are still popular because it's so difficult to fit 3 kids (much less 4+) in a regular car. Although I can't think of GM's current minivan here, either. I don't think they have a good entry in that category.

It really depends on how long you drive your cars and how much mileage you're going to put on them. If you don't bring them in for service and do over 15K a year, leasing is going to cost you badly at the end.

heffer569

Wed, Mar 23 2011, 9:49 pm

Chrysler also has a minivan as well as Nissan Volkswagen and im sure a few more. Ford is even coming out with a mini minivan in 2012 not exactly sure how it's mini I think it isn't as long
I'm also sure that Canada is different then America but here in the good ole us of a gm is definitely still leasing.

saw50st8

Wed, Mar 23 2011, 9:57 pm

In general, purchasing is better.

When we were looking at vans, we were debating between new and used. We ultimately chose new because we wanted to put 3 kids in the center row with latch, which is only available on the 2011 Honda Odyssey. If a feature like that isn't important, go used.

Also, check out rental car websites where they sell their cars. They sell for good deals and they get a really good overhaul before you buy them.

Justlookup

Thu, Mar 24 2011, 4:55 pm

Well, I can just tell you what happened to us: Three years ago we purchased a used nissan maxima for $6000. Since then until 4 months ago when we leased a car, we've had to put in over $2000. At the point when we decided to lease, we had to do more repairs, costing another few hundred dollars. That was when we said, what is going on here? We made a cheshbon and found that it would be cheaper to lease a car for the next three years then how much it has been costing us and how much it would probably cost us to keep this car for another three years. The fact is, unless you are very lucky, old cars need repairs. That's just the way it is. Its not just buy the car and occasionaly touch up something. Our car was in EXCELLENT condition when we bought it. But it was 6 or 7 years old when we bought it and we needed to change things constantly as they stopped working. It just wasnt worth it for us. And now, this same car, even with all the new parts that we put in, wont sell for more than $3000.
I do understand why people would want to buy a used car, but usually, its not worth it. Old cars just need constant repairs. Thats the way they are even if in good condition.