Today's Huddle debate: Buying vs leasing a car?

[Panthro]

cars are a depreciating asset. it all depends on what you want.

If you are a monthly payment shopper you can get more car when you lease. My preference would be to buy a car 2-3 years old and drive the hell out of it.

I will also sell you my '01 Accord with 191k miles on it for $5.5k

[Cat]

Depends on what you want out of a car. What are your goals?

Do you want to own it forever and run it into the ground? Or do you want to have a nice car for a while and then buy another in a 5ish years?

[Hawk]

I totally agree that a car is a depreciating asset, but I'm pretty sure a purchased car will have at least some positive value in it after 2 or 3 years and your lease vehicle will have zero. Throw in additional mileage and the least amount of damage and that lease vehicle cost starts to climb as well.

[Darth Urious]

Lease vehicles come with too many restrictions...

If I'm going to be driving something, I'm not going to have people telling me how much I can drive it or anything like that...

[Panthro]

I totally agree that a car is a depreciating asset, but I'm pretty sure a purchased car will have at least some positive value in it after 2 or 3 years and your lease vehicle will have zero. Throw in additional mileage and the least amount of damage and that lease vehicle cost starts to climb as well.

going to disagree with you here a bit.

It depends on what he puts down, the term of the purchase, and the type of vehicle. All those will determine whether or not he owes more than its worth aka Upside down

A lease has value because that value is what you actually pay for. You can also buy gap insurance to protect yourself. You can also pre pay for mileage then get it back whe you turn your lease in.

[The Saltman]

I agree with not leasing a car. Buy used. Pay for carfax.

[Hawk]

I was considering all things equal...same payments etc.

There are times when a lease is better...sure...like I said, if you can write off a portion or all of the lease payment as a biz expense. You also typically pay less tax on a lease, here anyway, because you only pay tax on the portion your lease will cover...up front anyway. I just think in general, without a write off, leases are much better for the dealer than the customer.

[Hawk]

pretty decent summary...unbiased as well.

http://www.investopedia.com/articles/pf/05/042105.asp#12997740111372&close

[pstall]

for some background. 99% I do NOT like payments either. My old Montero was totalled about a month or so ago. I knocked out some debt with the ins money. That vehicle was paid off.

So now, I don't have cash on hand to buy a car outright. Maybe put some down on a used sure.

But if I go lease, I will drive all of a 2-3 miles a day to park at the light rail. I will drive on the weekends for sure but I won't come close to 1k a month in miles.

I don't view a car as investment. I got lucky with the Montero. Took it off a buddies hands for 150 a month and it was paid off in 2 yrs 0%. He need some help and so did I so it was a win/win.

Diff deal now. Wife is working full time again and is back to 8-5 land.

[Panthro]

I agree with not leasing a car. Buy used. Pay for carfax.

Carmax???

[D34Williams]

buy used. pay cash.

Best advice on anything in your life. Leasing is for losers.

[pstall]

Best advice on anything in your life. Leasing is for losers.

we are talking about cars. not houses

:chillpill:

[D34Williams]

we are talking about cars. not houses

:chillpill:

I'm chilled.

I know, and I am talking about cars. But the principle is the same. Pay with cash, used, and you aren't out of pocket as much money at the rate as if you were to pay cash new, or lease, new or even used. Dynamics of it change slightly on different things, whether it's a house or land, but the principle doesn't. May be not always possible, but it's good advice, for anything in life. :thumbsup:

[Purity-Control]

but in all seriousness... buy used, pay cash... hell, you could get you a late 80's/early 90's Toyota truck, and it would still run like new...

Yeah that was my philosophy too, I had a 92 ford probe a couple of mid 90's BMW's a 98 Chevy Truck all without problems,

Until I bought a 97 Audi A4 i got 2yrs of perfect running out of it before I started replacing it piece by piece basically pumping in another few grand in repairs & parts before the tranny went and I finally had to cut my losses, it was a total nightmare.

Basically 1 bad experience out of 5 but it was an expensive pain in the ass experience that I wouldn't want to go through again, So I bought new a few years ago.

If you do go the used private party route it should be in the back of your mind that you never really know how hard the miles are on the car was is properly serviced etc etc (hopefully they have all the service records) I wouldn't even go look at a car unless the seller had records.

In the case of my Audi it was from a dealer who I had done business with before, it had all the service records and even came with a 5k warranty but it didn't matter I only got 2yrs out of it before it became a money pit.