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To lease, to buy used or finance a new car



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amother
OP


 

Post Tue, Jun 23 2020, 2:12 pm
If you would have a lump sum of cash for a car would you spend it on a used car, lease or finance a new car with the hope of reselling?
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amother
Emerald


 

Post Tue, Jun 23 2020, 2:14 pm
amother [ OP ] wrote:
If you would have a lump sum of cash for a car would you spend it on a used car or a lease?


I’d rather buy a used car in good condition than leased as usually it ends up cheaper that way. If I was rich I might lease cars but alas I am not 😉
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lamplighter




 
 
    
 

Post Tue, Jun 23 2020, 2:36 pm
From a financial perspective, leasing is not wise.
For some jobs it may be important though.
We try really hard to not finance things so we would opt for a reliable used car.
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Amarante




 
 
    
 

Post Tue, Jun 23 2020, 3:17 pm
Leasing a car is a terrible financial decision unless you are one of the very few people who use it almost entirely for business and so it simplifies obtaining the business deduction.

Leasing for individuals is done because it is a penny wise and pound foolish financial decision - the monthly lease payments are lower but you will be paying lease payments for the rest off your life if you finance. Even if you finance a car with a loan, you will have the ability to have a few years without payments and you can save for your next car purchase by continuing to make payments TO YOURSELF :-).

The best way to own a car is to pay cash for the most reliable car you can afford. That might be a well reviewed car that is two or three years old. However, sometimes it can also be a new car if you are sensible and drive the car for many years. While it is true that a new car depreciates immediately, the early depreciation is meaningless if you keep the car for ten years or more AND with a new car you know exactly what kind of maintenance the car had and if there are any problems.

When you get a car and pay cash, put away the amount that would have gone to car payments in a fund so that you will never have to lease or finance a car. As I wrote above, if you borrowed, keep making payments to yourself after the loan is paid off.

If you select the right car, it will last for many years and many miles.


Last edited by Amarante on Tue, Jun 23 2020, 4:15 pm; edited 2 times in total
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raich




 
 
    
 

Post Tue, Jun 23 2020, 3:22 pm
I vote for used car. Get one whose resale value will stay high, mostly Japanese cars. We prefer Toyotas hands down.
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amother
Amethyst


 

Post Tue, Jun 23 2020, 3:23 pm
Leasing actually comes out more or less cheaper or the same as buying a used car
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Amarante




 
 
    
 

Post Tue, Jun 23 2020, 3:34 pm
amother [ Amethyst ] wrote:
Leasing actually comes out more or less cheaper or the same as buying a used car


This is not correct. A lease is the worst economic decision for most people as it’s a trap. Especially for OP, who has the ability to purchase a car with no payments.

If you lease a car you make payments forever.

When you buy a car you own the car and depending on circumstances, you will have no payments for a significant amount of time. A reliable car will last at least ten years under normal circumstances which means even with a five year loan, you will have no payments for at least five years.

A leased car generally only permits low mileage and there are penalties for driving more than the low mileage in the lease and also has penalties for returning a car in less than pristine conditions.
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amother
Amethyst


 

Post Tue, Jun 23 2020, 4:55 pm
Amarante wrote:
This is not correct. A lease is the worst economic decision for most people as it’s a trap. Especially for OP, who has the ability to purchase a car with no payments.

If you lease a car you make payments forever.

When you buy a car you own the car and depending on circumstances, you will have no payments for a significant amount of time. A reliable car will last at least ten years under normal circumstances which means even with a five year loan, you will have no payments for at least five years.

A leased car generally only permits low mileage and there are penalties for driving more than the low mileage in the lease and also has penalties for returning a car in less than pristine conditions.


The cars today are made very junky I see with the cars we lease theyre basically done by the time the 3 years are up. A used car will have to sit in the mechanic a lot which costs money shelling out say $1000 to fix something in the car is a lot of money that not everyone has spare to use. I see with people I know who buy used cars theyre constantly in the mechanic and then they spend on car services which is more money. The lease + money you spend on scratches when you return it + a bit over the 10,000 - 12,000 a year mileage adds up to around the same as when you buy a used car and you dont have to be so busy with it all the time.
We travel a lot and we used exactly 10,000 the past year on mileage
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Amarante




 
 
    
 

Post Tue, Jun 23 2020, 5:08 pm
amother [ Amethyst ] wrote:
The cars today are made very junky I see with the cars we lease theyre basically done by the time the 3 years are up. A used car will have to sit in the mechanic a lot which costs money shelling out say $1000 to fix something in the car is a lot of money that not everyone has spare to use. I see with people I know who buy used cars theyre constantly in the mechanic and then they spend on car services which is more money. The lease + money you spend on scratches when you return it + a bit over the 10,000 - 12,000 a year mileage adds up to around the same as when you buy a used car and you dont have to be so busy with it all the time.
We travel a lot and we used exactly 10,000 the past year on mileage


I don’t know what kind of cars you lease that are broken down after three years but that is not the experience of me, my family or the people I know who buy well rated cars. Honda’s, Toyota’s, Suburu im the middle range. Lexus in the higher priced lines.

I don’t know anyone who has a car that is junked after three years and 30,000 miles which is the mileage you claim to have when you turn your lease in.

Cars are made much better than they were in the past. Normal maintenance is far cheaper than endless car or lease payments. Even insurance payments are cheaper for an older car so the annual cost for a quality older car is far lower than lease payments especially when you factor in the never ending lease payments as well as the upfront payments which most leases require.

I have never heard anyone state that leasing a car and turning it In every three years is less expensive than buying a high quality car, maintaining it and using it for ten or more years.

I do know people who lease cars but they agree that it is a luxury because they like new cars which is fine if you want to spend your discretionary income on cars. I just want my car to drive me safely, reliably and comfortably Very Happy Very Happy When it is no longer reliable, which is generally after a decade or so, it’s time to buy another well reviewed reliable car.
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amother
Amethyst


 

Post Tue, Jun 23 2020, 5:14 pm
Amarante wrote:
I don’t know what kind of cars you lease that are broken down after three years but that is not the experience of me, my family or the people I know who buy well rated cars. Honda’s, Toyota’s, Suburu im the middle range. Lexus in the higher priced lines.

I don’t know anyone who has a car that is junked after three years and 30,000 miles which is the mileage you claim to have when you turn your lease in.

Cars are made much better than they were in the past. Normal maintenance is far cheaper than endless car or lease payments. Even insurance payments are cheaper for an older car so the annual cost for a quality older car is far lower than lease payments especially when you factor in the never ending lease payments as well as the upfront payments which most leases require.

I have never heard anyone state that leasing a car and turning it In every three years is less expensive than buying a high quality car, maintaining it and using it for ten or more years.

I do know people who lease cars but they agree that it is a luxury because they like new cars which is fine if you want to spend your discretionary income on cars. I just want my car to drive me safely, reliably and comfortably Very Happy Very Happy When it is no longer reliable, which is generally after a decade or so, it’s time to buy another well reviewed reliable car.


Everyone I know who leases is because they used to buy and then said they had enough of being so busy with their car/s that they switched to leasing and its the best thing they ever did.
Im referring to the cheaper leases - Honda, Hyundai, Nissan..
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amother
Beige


 

Post Tue, Jun 23 2020, 5:15 pm
Amarante wrote:
Leasing a car is a terrible financial decision unless you are one of the very few people who use it almost entirely for business and so it simplifies obtaining the business deduction.

Leasing for individuals is done because it is a penny wise and pound foolish financial decision - the monthly lease payments are lower but you will be paying lease payments for the rest off your life if you finance. Even if you finance a car with a loan, you will have the ability to have a few years without payments and you can save for your next car purchase by continuing to make payments TO YOURSELF :-).

The best way to own a car is to pay cash for the most reliable car you can afford. That might be a well reviewed car that is two or three years old. However, sometimes it can also be a new car if you are sensible and drive the car for many years. While it is true that a new car depreciates immediately, the early depreciation is meaningless if you keep the car for ten years or more AND with a new car you know exactly what kind of maintenance the car had and if there are any problems.

When you get a car and pay cash, put away the amount that would have gone to car payments in a fund so that you will never have to lease or finance a car. As I wrote above, if you borrowed, keep making payments to yourself after the loan is paid off.

If you select the right car, it will last for many years and many miles.


You’re talking in absolutes. We aren’t all financial idiots. Many ppl lease because of things like employee benefits situations (aka boss pays for lease, wouldn’t pay you monthly for the car)

I cannot fathom buying a new car because it depreciates at a depressing rate. I prefer to finance second hand (think 2/3 years old, not 10) and resell every 5 ish years. I only buy Toyota’s or Hondas
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Amarante




 
 
    
 

Post Tue, Jun 23 2020, 5:41 pm
amother [ Beige ] wrote:
You’re talking in absolutes. We aren’t all financial idiots. Many ppl lease because of things like employee benefits situations (aka boss pays for lease, wouldn’t pay you monthly for the car)

I cannot fathom buying a new car because it depreciates at a depressing rate. I prefer to finance second hand (think 2/3 years old, not 10) and resell every 5 ish years. I only buy Toyota’s or Hondas


If you read my first post, I stated there might be business reasons for leasing and my advice was specifically for those individuals who use cars for personal purposes and have no business write off and don’t get a car as a corporate benefit.

My aside regarding purchasing a new car acknowledged depreciation in first two years but stated that it might be moot for those people who keep a car for a decade or more like I do. When I bought my car in 2018 the difference between a relatively low mileage used car and a new car wasn’t that significant especially since I keep my cars for more than a decade and there was value to me in not worrying about the condition of the ised car and the simplicity of purchasing a new car. Obviously buying a new car is not the right decision for everyone but I carefully considered the cost benefits.

I don’t know why anyone is seeking financial advice if they don’t want to receive financial advice. I am not starting threads in which I offer unilateral financial advice.
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silverlining3




 
 
    
 

Post Tue, Jun 23 2020, 6:04 pm
If we'd have the chunk of money, we would try buying a slightly used Toyota. So that's my advice to you OP.
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amother
Mint


 

Post Tue, Jun 23 2020, 6:44 pm
amother [ Amethyst ] wrote:
Everyone I know who leases is because they used to buy and then said they had enough of being so busy with their car/s that they switched to leasing and its the best thing they ever did.
Im referring to the cheaper leases - Honda, Hyundai, Nissan..


I’m the exact opposite. Leased because of all the reasons you’re mentioning and everyone claiming it would be cheap... We leased a minivan for three years at about $350/month (that’s a really good deal). At the end of three years we’d spent $12,600 over the lifetime of our lease. They also charged us about $1000 when we turned it in for various invisible dings and nicks... with whatever other fees etc it cost us $14,000 for three years.
Since then, we bought used minivans for slightly more ($16,000) and driven them happily for 10+ years. Even WITH repairs our used cars have cost us a fraction of the amount of $ per year that our leased van did.
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amother
Silver


 

Post Tue, Jun 23 2020, 7:24 pm
Leasing is the same as paying rent. I see it everywhere in NYC but that doesn’t make it smart financially.
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