Lease or Buy?????

[willsonjone]

Hi all,
I am going to change cars in the next month or two, just wondering if it’s best to buy or lease. Does anyone here lease their car or know anything about it? Only just started to think about it so haven't really looked into it yet. Just wondered what happens with services and does it cost more on your insurance??

['97ventureowner]

It really depends on your individual situation. There are both pros and cons to leasing or buying a vehicle.
Pros of leasing:
1) You can get a new vehicle in as little as 2 years to every 4 years.
2) Lower monthly payments.
3) You can drive a nicer car than you normally would have been able to afford if you bought it.(Goes with #2)
4) You pay the sales tax over the life of the lease.
Cons of leasing:
1) Also requires a downpayment just as if you were buying the vehicle.
2) Extra fees. ( mileage costs if you go over the stated mileage,security deposit, etc.)
3)You don't technically own the vehicle, the leasing company does.
Pros of buying a vehicle:
1) You own the vehicle.
2)No "over the mileage " charges, you can put as many miles on the vehicle as you want without penalty.
3)If you intend to keep the vehicle a long time and can get favorable financing, the overall costs may be cheaper.
Cons of buying a vehicle:
1) Unlike a lease, you can't "walk away " from a car you've purchased at the end of the term
2) You are buying an asset that will depreciate.
3) If you find out you really dislike the vehicle you've bought, it might be harder to get out of owning it,( trading it in , you may lose money.)
These are just a few of the pros and cons. There are certainly more. Like I said previously, it boils down to each individual's circumstances. Do some research and know the facts before making an informed decision.

[Dan90]

It's better to buy, if you have money. It's better to own one, than afraid, what if you crash it.

[vv42]

Originally Posted by jtaylor1971

Why pay money to "rent" a car? That is basically a lease. It is better to own it, but if it is new, you will drive off the lot with depreciation that will make it worth less than you owe, just keep that in mind.

Depreciation is an issue whether you buy or lease. Obviously, when you buy new the depreciation will be greater than if you buy a used car. When leasing, the concept of residual comes to play. A car such as a BMW will have a much higher residual than a Kia (for example). The higher the residual the better--basically, this is how much the car is worth at the end of the lease period. This plays into the cost of your lease payment...

And, '97ventureowner did a great job of pointing out the Pros/Cons... It comes down to cash flow and your life style. A lease is a great way to get into a more expensive car than you could with buying it out-right. Also, if you are one that likes a new car every 2-4 years, a lease may make sense...

[sickcallawayc12]

Yeah, I like being able to call it my car.

[vv42]

Originally Posted by sickcallawayc12

Yeah, I like being able to call it my car.

AND, if you buy versus lease, you can mod the car. Some lease companies have verbage in the contract against engine or aesthetic "enhancements" to the car.

[ghostridedaweb]

I would buy. Owning a vehicle is an investment and a good one if you take care of your ride and follow up on proper maintenance. I once leased a vehicle and went way over the 1000 miles a month they gave me which ended up costing lots of extra $$$.

[vv42]

Originally Posted by ghostridedaweb

Owning a vehicle is an investment

Actually, owning a vehicle is generally a poor investment--at least in terms of the good ole Greenback. A good investment would increase in value over time, not decrease in value (as most vehicles do). The rare exception of classic American muscle cars, 50's and 60's Ferraris, etc. which ARE an investment.

[Dboy23]

Originally Posted by vv42

Actually, owning a vehicle is generally a poor investment--at least in terms of the good ole Greenback. A good investment would increase in value over time, not decrease in value (as most vehicles do). The rare exception of classic American muscle cars, 50's and 60's Ferraris, etc. which ARE an investment.

Not necessarly, I just got a brand new Dodge Charger R/T, the price I got it for is literly less than half of the street price for them and I can drive it for two years and get AT LEAST my money back if not more, it's more about buying for the right price not so much as buying the right car.

In my opinion leasing is just throwing your money away, if you find a good deal on a car you should get a loan and buy it, especially if you know it's a good investment. Also get some advice from someone on the price and what not so you know your making the right decision buying the car. Leasing is just throwing your money away at least if you buy it you'll get some or in my case all of your money back and enjoy having a car to call "your own" in the meantime, plus the freedom to change it unlike a lease your stuck for a minimum of 2 years (27 months).

[akboss]

Originally Posted by Dboy23

Not necessarly, I just got a brand new Dodge Charger R/T, the price I got it for is literly less than half of the street price for them and I can drive it for two years and get AT LEAST my money back if not more, it's more about buying for the right price not so much as buying the right car.

In my opinion leasing is just throwing your money away, if you find a good deal on a car you should get a loan and buy it, especially if you know it's a good investment. Also get some advice from someone on the price and what not so you know your making the right decision buying the car. Leasing is just throwing your money away at least if you buy it you'll get some or in my case all of your money back and enjoy having a car to call "your own" in the meantime, plus the freedom to change it unlike a lease your stuck for a minimum of 2 years (27 months).

Not sure where you're getting the 'street value' for this Charger R/T, but I just did a local autotrader search for my area and found a 2008 (2 years old) Charger R/T for $30K in good condition, it retails new for $45K plus tax CAD. That means instead of a $45K investment sitting in a 2-year GIC at the bank and EARNING you around $2,000, it actually lost $15,000. This is not uncommon, and if you crunch the numbers, you will indeed find that cars are a horrible investment.

That being said, most of us need them, which is why I'm a fan of buying a car that meets my needs without being excessive. Part of an article I read in MoneySense magazine (a good read, BTW) suggested that purchasing is better than leasing, simply because you have more control over how you pay for the car and your ownership rights while you own it. But don't think that financing a car means you 'own' it outright - whether lease or finance, somebody else is still holding the value of the car for you. If you owe money on it, it isn't technically 'yours'. Just ask the repo man.

Calculate your budget and find a car you can finance over 5 years with a monthly payment that suits your lifestyle, and lock into the lowest interest rate you can find. That's my advice.

[Jagster]

Since leasing favors those that want to drive a more expensive car than they can normally afford, does that mean it is alot easier to get approved for a lease than it is when buying?