Leasing Vs. Buying a Car

Please don't lease a car!!!!! That is one of THE biggest financial mistakes out there!! Many folks end up oweing more than the car could have ever been worth!

A great book to read is by Dave Ramsey called "THe Total Money Makeover".

The lady below me had a great answer! So I would like to suggest another vehicle. I have a dodge durango with 3 rows. It is JUST the right size, gets GREAT gas milage (we don't have the hemi) and i LOVE IT!! Also it would be much cheaper than the Acura. Also the Mazda CX-7 is a 7 seater. We have owned Dodge's and Mazda's and loved them equally!

I think leasing is only a reasonable option if you value having a new car. If this is something you're willing to pay for, and you want a new one every 3 years or so, you should lease. Otherwise you're just throwing your money away IMHO. You will probably pay the same or similar for a lease as you do in car payments over a few years, and at the end of the day you either have to give the car back (lease) or you get to keep it (buy). For me - as someone who doesn't care at all about how old my car is as long as it gets me from Point A to Point B, I owuld never lease.

Leasing is good for a buisness venture.If you don't mind shelling out all that money for a lease only to give the car back in the end, great. BUT, if you are a hard working family who likes to get something for their money, buy a car. Leasing has tax advantages for businesses. My personal view is that at the end of the day I would rather have the satisfaction that I bought something and got something in return that renting a car only and paid more than buying only to give it back in the end.

In my opinion, leasing is like renting. I think leasing is only an option if a) you need a car every 3 or so years b/c you travel a lot for work & don't want to deal w/ the wear & tear b) need a new car every few years for business reasons (taking clients out, etc.) c) may re-locate to another state. I think many people lease cars because they cannot afford to buy the car they want (& they simply don't want to live within their means!). I know several people like this. We always buy...1 of our cars is 9 yrs. old. Great condition, well maintained, we had a car payment for 4 yrs. then have not had one for the last 5!

I did some research on this when we bought our cars. Basically, what I was told was if you keep your cars a long time it is better to buy them. If you are someone who likes to change cars a lot then leasing is a good option. Also, if you drive a lot of miles you should stay away from leasing because there is a limit of the number of miles you are allowed to drive on the lease and you will get charged for any miles over that (it is often like 15 cents per mile and can add up to thousands of dollars when you turn the car in). If you tend to dent your cars a lot (ex: parking on the street in Chicago) you can get charged a lot of money for those small dents/scratches when you turn a lease car in. If you have a small business, your business may be able to pay for the lease. Overall, it made more economic sense for us to purchase since we will keep the car more than 3 years. I would go to www.edmunds.com They have great calculators to help you figure out the positive/negatives for leasing and buying. They also have great info/reviews on different cars. Good luck.

To lease a car is only the temporary solution , So i would like to suggeset you to buy the car though it is <a href="http://www.autohubinc.com/ ">used car</a> or a new one.

Hi R.,

My husband and I thought we would never lease. We have always bought cars in the past. But because we are having to really budget right now, we found that leasing was perfect for us. Our thought process was as follows: When you buy a car you are losing a certain amount of money when you drive it off the lot. You never know if the used car you bought will have major issues down the road. We didn't have enough money to buy a used car, and when you lease we only had to come up with a smaller amount of money. I don't drive very far, so we aren't even close to using up all our miles. I will say this, if you drive a lot leasing is NOT for you. You will pay a lot of money if you go over your miles.

Here are the positives when it comes to leasing:
1. Brand new car that you may not be able to afford if you were buying it yourself.
2. They pay for all your major break downs. The only thing you need to worry about is oil changes and tire changes.
3. You're monthly payment is significantly lower than a used or new car that you bought.

Negatives to leasing:
1. If you drive a lot then leasing is not good for you.
2. You are not paying to own the car. (Side Note: I do know that if you decide that you really like the car that you've been paying for over the past few years. The dealership will be able to make a deal with you so you can eventually own it.)
3. You can't get rid of the car until your contract is up. Which can be anywhere from 3-4 years.

Leasing worked for our family because we don't drive a lot. We didn't have a lot of money to make a big down payment with. We needed a reliable car having two kids, and we were able to make it work with the amount of money we did have. We leased a 2007 Nissan Murano. We have all the fun gadgets as well. We are paying $250 a month. We had to make a down payment of $1000.00, which was very reasonable for us. We are planning on buying a car the next time around. But for now leasing is the best option, and we wouldn't of changed a thing.

Hope this helps. My end advice is that leases don't work for everyone. So be careful and make sure you look at all the options that you have and pick the best one for your family.

Any more questions about leasing let me know.
A.

I agree with everyone's advice about buying. I just read an article in a business journal that says the only good reason to lease is if you can write it off as a business expense.

Good luck.

I would recommend buying a car that is 1-2 years old. We bought our Subaru that was 1 year old from the dealer when the other person's lease was up. We got a low mileage car, most of the depreciation of the car was done before we bought it and it still had it's full manufacturer warranty.

The other thing you have to remember about a lease is that it is not YOUR car. It is still the dealer's and you are paying to use it. If you go over mileage you pay around $0.35 a mile. Whatever damage is on the car, you can be liable/responsible for the repairs (if your kids stain the carpet, you can be liable for the professional cleaning of the carpet and if the carpet does not come clean then you can be liable for the depreciation of the stain).

Leased cars are good for people who like to get new cars every few years, don't mind the loss of money in the car and aren't worried about their kids messing up the car...or other dings, dents, etc.

My husband was a car salesman several years ago and insists on only buying 1-2 year old cars. No reason to buy a $40,000 vehicle and the moment you drive it off the lot, it is now only worth $34,000.

But, whatever route you choose to go...make sure you buy Gap Insurance!!! That insurance covers the difference between the value of the car and the amount of your loan.

We have leased and bought. Basically, leasing gives you the option of getting a car for lower payments per month. However, you own no equity in the car and still need to pay taxes/etc. You also need to be very careful about mileage and condition of your car. The upside - you can trade in your car in 3 years and get a new one. Some programs now have lease to buy... it depends on the program but many times, you get bit twice with taxes. Purchasing will make you have higher payments but the cars is "yours" and need to deal with depreciation/etc.

I agree with everyone else that buying is the way to go. We just did a lot of research about this. I'll be having my second baby in a few weeks, and we needed a 3rd row as well. I found out that because we live in Chicago, there is an 11% tax on top of the leasing price. It is ridiculous!

We wound up buying a 2006 Mercury Mountaineer for a GREAT price. It only had 19,000 miles. We compared it to a 2008 and they were IDENTICAL. Aside from about $12-15,000 cheaper. It's just a thought for you, but the 3rd row seating very nice. Also, we were able to get the top model because it was an '06. All the luxury perks are nice, and the price was great.

Anyway, I say go with a newer, used car :)

Unless you're the type of person who always ends up wanting to get a new car after a few years, leasing is a WASTE OF MONEY. It's for people who can't keep their cars because they're always wanting something newer. A lot of our friends, who make way less money than us, lease cars and I truly believe it's because they can pay a little less per month for them, and drive around in Jaguars. Leasing is like renting a home, a waste of money. Cars are a bad investment anyway because of the depreciation, but leasing is just like throwing money down the drain because you can't get ANY money out of the car at all when you're done with it! The best thing to do is buy a car, and run it til it dies. We are business owners, and both still have the cars we owned when we were met. I have a 12 year old Explorer, he has a 6 year old grand prix. We could definitely afford new cars, but why get them? If you live cheaply while you're young, you'll reap the rewards later!

I have been leasing cars for many years now. I personally like getting new cars every few years because I get bored with the car and it has worked out when our family has grown I am not stuck with a car that is too small for years waiting to trade it in. Yes, you do lose out at the end of the lease because you have to turn it in and get nothing out of it,or you can purchase the vehicle at the set price, but most dealers work out special offers for you if you lease another car from them. I also love the fact that I have a bumper to bumper warrenty for the entire time I have the car. Normal wear and tear is acceptable, and you will not get charged for that in the end. Any ding on the outside that is biger than a credit card are the ones you get charged for. I have never had to pay for excess wear and tear on any of my leased cars, and I have 2 small children and am not overly cautious about keeping the car clean. And the payments are generally lower than they are when you buy. If you drive ALOT, then it isn't a good option because you are given a set number of miles and have to pay if you go over. (10-15 cents/mile) Car prices are a rip off, no matter which way you go. But I have been very happy leasing.

I don't think anyone else has mentioned it, but Illinois is a uniquely bad place to lease a car, because of their regulations on paying sales tax on the value of the entire car rather than just the value of the car during the lease. Be cautious! Here's some more information:

http://www.leaseguide.com/faqs.htm#illinois