Forum: Advice / Cars & Driving

What is the advantage of leasing a car instead of buying it?
By forgetxmexnot
On Sun Dec 20, 2009 12:55 PM

I know I'm just totally ignorant on this subject... but what is the advantage of leasing a car over buying? I've heard right now, there isn't really one. But what WAS the advantage? It just seems like all the commercials on TV and whatnot advertise a leasing payment that's pretty much the same as a payment you would have if you bought the car, which doesn't make much sense to me.

5 Replies to What is the advantage of leasing a car instead of buying it?

re: What is the advantage of leasing a car instead of buying it?
By kandykanePremium member
On Sun Dec 20, 2009 01:07 PM
One of the advantages used to be the warranty. But as manufacturers have extended the warranties to cover most new cars well over three years, that's not such a plus anymore. Another advantage is at the end of your contract, if you want, the dealership has to take it back. But you are almost always upside down on the loan at that point, so it doesn't make much sense to me. And that want that big lump payment at the end. Read the fine print! The biggest advantage seems to be the lower monthly payment, but it just snowballs on you at the end of the contract with that final payment, sometimes in the thousands.

If you buy it, at least you can list the car as an asset. But I would never buy a brand new car, again. The immediate depreciation is just too much to work with.

kk~
re: What is the advantage of leasing a car instead of buying it?
By Chaconnemember has saluted, click to view salute photosPremium member
On Sun Dec 20, 2009 01:27 PM
The major advantage to leasing is in the corporate sector. When a company buys a fleet of cars, leasing has some advantages for taxes...everything is an expense, not a capital purchase, and companies don't like to tie up money in a depreciating asset.

For an individual, there are few advantages and many disadvantages. The lease payment is based upon driving only 15,000 mile per year which is nothing for most people. I drive 13,000 miles per year and I don't even go back and forth to work anymore (I'm retired.) You get hit with a milage charge when you turn the car in. I suppose someone with a lower income who would like to impress people with a BMW, might like a lease deal. Most financial experts say it is a bad idea for most people. We have a friend, little old lady schoolteacher, who leased a Mercedes. She only drove about 3000 miles per year, leasing may have made some sense for her. She now has Alzheimers and doesn't drive at all. She turned the car in at the end of a 3 year lease (on the same day I bought my car...I would have bought that one from the dealer had I known about it.)

I almost always buy new cars. When I worked, I drove over 50,000 miles per year so I wanted a car I knew would outlast the payments. I bought a used car when a girl at work had a 95 Toyota Celica, got divorced and couldn't make the payments. It only had 15000 miles on it and one year old. I bought her car and she bought my 1990 Celica...same color even, and she could afford paying for that car. We went to the DMV together to do the legal stuff and I switched license plates in the parking lot. I also bought some used Toyotas for my kids when they were in college.

I buy new because I can afford to. Someone has to buy new cars LOL.

Jon
re: What is the advantage of leasing a car instead of buying it?
By Moonlitefairy06member has saluted, click to view salute photos
On Sun Dec 20, 2009 05:26 PM
My parents leased me a car. It ended up not being the best idea and if they could have done it over they would have bought it. I don't use enough miles on the car (I get 12,000 a year) as a full time college student who lives on campus. So when the lease is up, I'll be way under the miles I am supposed to have obtained. Also because insurance is so high for young drivers that on top of the lease payments made there be a ton of car related payments. Just buying the car will have made it better. My lease is up the summer. Depending on what I end up doing in terms of school and stuff I guess will determine if I buy the car (with my parents help or at least loan) or turn it in. I wish it could have just been mine from the start and not have to worry about this stuff now.
re: What is the advantage of leasing a car instead of buying it?
By CrayolaPremium member
On Sun Dec 20, 2009 06:10 PM
Leasing is the most expensive way to "own" a car. Buy a car that you can afford, ideally, without payments.
re: What is the advantage of leasing a car instead of buying it?
By Chaconnemember has saluted, click to view salute photosPremium member
On Mon Dec 21, 2009 08:38 AM
^ I don't really think about the way I pay for my cars as "payments." As far as I'm concerned, I need a car and needed one even more when I worked, as did my wife, as there was no public transportation options to our workplaces. To me a car was just a more or less fixed monthly expense just like food and utilities. While I now pay off a car in less than a year, I could not always do that, so in our budget planning we just added up the total costs of owning a car...the car, fuel, maintenance, insurance, parking etc. for the two cars and added that to our budget. When our kids were in high school/ college, we routinely had four cars in the household. Generally we did not have payments on the two the kids used as they were either our older cars which we just didn't trade in; or, the were bought used. They need the cars because of after school jobs, summer jobs in different places (and even different states) and for getting back and forth to college...1000 miles from where we live. For one brief shining moment we actually had six cars. Now it is just one each for my wife and myself.

Jon

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