When is leasing a car a good idea?

[thefuzz]

Small SUV, like an Edge or similar.

 

Need to not be bogged down by big payment.

 

I'll likely get something gently used, might even be forced to trade in the ole Jeep :( :( :(

 

Going to do this in easy terms here, it will not be exact but close.

 

 

Toyota Highlander, stripped model for lease is 2700 down and 289 per month, 12k miles per year max.

 

Using rough numbers after all is said and done you will have about 14K in this car over the first 3 years, and hope that you don't have to pay excessive wear and tear when turning it in.  You can chose to purchase the truck at that point for 17,250, or walk while getting nothing back.

 

 

Buy a 2012 version, with far more options, and you will be in about 16,500 at the end of 3 years, but will have about 7-8 k in equity when you sell the car.  In essence, walk away with cash in your pocket, but be out a little more per month than with the lease.

 

14k vs. 16,500, but nothing or 7K when walking from the deal.

 

 

Rough calculations the lease will cost you about 388 per month and the purchase will cost about 263 after the equity.

[h0llywood]

Going to do this in easy terms here, it will not be exact but close.

 

 

Toyota Highlander, stripped model for lease is 2700 down and 289 per month, 12k miles per year max.

 

Using rough numbers after all is said and done you will have about 14K in this car over the first 3 years, and hope that you don't have to pay excessive wear and tear when turning it in.  You can chose to purchase the truck at that point for 17,250, or walk while getting nothing back.

 

 

Buy a 2012 version, with far more options, and you will be in about 16,500 at the end of 3 years, but will have about 7-8 k in equity when you sell the car.  In essence, walk away with cash in your pocket, but be out a little more per month than with the lease.

 

14k vs. 16,500, but nothing or 7K when walking from the deal.

 

 

Rough calculations the lease will cost you about 388 per month and the purchase will cost about 263 after the equity.

 

Great way to put it.

[thefuzz]

The quick answer...it's rarely a good thing, unless you need an expensive car that depreciates quickly.....like say a brand new Cadillac CTS.

[panther4life]

I love leasing...can get more car for the money and never spend money on tires or any maintenance at all...

Cars are not a good investment... The value plummets immediately and even tho you may go without a payment for a while if you do an outright purchase and keep the car forever.... I personally don't mind always having a smaller payment on a car that's never older than 3 years.

Up to the individual really but for me getting more car for less money and never having to do major maintenance is more important than keeping something long enough at a higher payment just so I can have a period of time without a car payment....

[PhillyB]

unless you absolutely have to buy a new car, just ride your old one out while you save up the money to pay cash for a new one. paying interest is literally throwing your money away. there is nothing less conducive to financial security than buying brand new or expensive cars unless you're already loaded.

[Panthro]

I love leasing...can get more car for the money and never spend money on tires or any maintenance at all...

Cars are not a good investment... The value plummets immediately and even tho you may go without a payment for a while if you do an outright purchase and keep the car forever.... I personally don't mind always having a smaller payment on a car that's never older than 3 years.

Up to the individual really but for me getting more car for less money and never having to do major maintenance is more important than keeping something long enough at a higher payment just so I can have a period of time without a car payment....

 

you sell cars, no?

[panther4life]

Double post

[panther4life]

you sell cars, no?

I do...been in the biz just shy of 8 years but it's been most of my adult life since I'm only 30

[Panthro]

No wonder you are steering them to leasing :)

 

$$$

[cptx]

My last couple of rides have been one owner used cars. I like to work on my vehicles too much for a lease. Whenever it needs something I can use it as an excuse to upgrade to better stuff. I really have no intention of selling so depreciation isn't really a factor. That said, I can see where leasing can be viable for people that don't want the hassle and want a low payment on a newer ride, I just enjoy being able to project on it if I want.

[panther4life]

No wonder you are steering them to leasing :)

$$$

Lol I hear ya but I don't recommend leasing to everybody....I do a full analysis of my individual customers wants/needs/driving habits and all that before advocating leasing or purchasing.

But for me personally I love leasing cuz I don't like paying more money monthly for something that I don't want to keep forever and pour money into such a depreciating asset

[thefuzz]

Lol I hear ya but I don't recommend leasing to everybody....I do a full analysis of my individual customers wants/needs/driving habits and all that before advocating leasing or purchasing.

But for me personally I love leasing cuz I don't like paying more money monthly for something that I don't want to keep forever and pour money into such a depreciating asset

 

 

The money will never work out, unless you are buying terrible cars, but if you like having a brand new car every 3 years it's a good thing.

[panther4life]

The money will never work out, unless you are buying terrible cars, but if you like having a brand new car every 3 years it's a good thing.

I don't look at cars as investment like that... More of a source of enjoyment... If I was over analytical about it and didn't use it for anything other than a source of transportation I'd buy a cheap used car.

No universal right or wrong way to do it. Totally up to the individual on what's best for them IMO.

I'm on my 4th brand new car since 06 so yes I love having the latest and greatest.

[MadHatter]

I used to work for Hendrick Automotive Group and did many different lease vs buy analysis for them (for promotional offerings).  Leasing makes sense for one specific type of buyer:

 

Are you a person who wants a new car every couple of years?  If you are and you drive a modest amount (12k miles or less per year), then leasing may be for you. 

 

You will never build equity in a car....but your payment is usually siginificantly lower in a lease than in a buy scenario (you are basically financing the expected depreciation in the vehicle over the life of the lease). 

 

However, if you like to trade every few years you really don't create much equity anyway.

 

If you are the type of person who wants to keep a car, pay it off, and have no payment....it is not for you