In general, how much more expensive is leasing than buying (if at all)?

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is OP, I actually have plenty of money to pay cash for a car and I’ve never wanted to upgrade my car with my wealth, so I can do either. I’m finding that a lease seems so easy, and the last two cars I have driven for 10 years required some pretty expensive maintenance towards the end. So I’m just trying to understand the general wisdom on how bad of a deal leasing is. I know interest rates are a factor.

If mileage is not a concern, leasing is VERY easy. Like you, OP, I'd internalized that leasing is "bad" but recently leased a car and I would definitely do it again.

I did find that lease pricing is not all the transparent, because of the different levers that can be moved. There are entire online communities devoted to how to negotiate the best possible lease. As a consumer, that felt annoying to me.

I'd definitely lease over buying used in the future. If I could comfortably by new, I would by new over leasing.

Yes, in general, negotiating a lease is much harder for the average consumer - the terminology isn't as straightforward as a straight up purchase and the salesmen know this. That's why they always are so focused on what you want your monthly payment to be - they can make the numbers match that payment easily by just changing around the rest of the equation. You need to go into a lease negotiation understanding how it works and what the figures mean, and also know exactly what the Money Factor (the interest you pay) should be. Dealers love marking this up because who actually knows the difference between a MF of .00056 and .00125? It looks like such a small difference! But is is 1.34 pct vs 3 pct.

[Anonymous]

Anonymous wrote:Leasing will be cheaper over very short periods (assuming you have enough mileage allowance) because the monthly payment will be lower because you aren’t paying for the residual value (the value of the car when you turn it in).


Owing will be cheaper over long periods because once you pay off the note you have no payments other than periodic maintenance.

You just need to calculate the payoff period.

Yeah my parents used to lease cars, and my sister does now. It’s not that they are driving fancy, expensive cars, they just didn’t have enough $$ for a decent down payment so leasing was cheaper in the short run, and maintenance costs are much less during the leasing period (whereas with a used car it’s more if a gamble). My dad actually convinced me to do this out of college too, he was so worried about me ending up on the side of the road somewhere with an issue and thought I should have a new car, but neither I or they had the money to buy one. It was the only time I leased but it worked out ok- I ended up buying the car after the lease period was up. Never ran the numbers for a cost comparison though.

[Anonymous]

Anonymous wrote:Your in luck, I have done a lot of research on this topic.

The answer isn't that Buying or Leasing is better -- because what it really comes down to is 1. What deal you can get (either buying or leasing), 2. Are you the type of person that will be willing to buy and hold on to a car until it dies or would you be likely to upgrade in 5-7 years? and most importantly 3. What brand car do you want to buy? (this is the key because some brands lease REALLY well - its all based on how much they depreciate)

Example --

I have a growing family. We are considering a Third kid in a few years but didn't want to lock into a a huge 3 -rower "just in case" . It seemed like leasing a car for 3 years and then reassessing our family needs when the lease runs up made the most sense to us. So --what should you lease? The answer is, which cars will most likely to keep their value (think honda, toyota, etc)? Dealerships do the math based on how much they will be able to sell the car for once your lease is up. If you buy a VW Atlas for example -- it depreciates significantly faster then say a highlander or a pilot. Therefore an Atlas lease wouldn't be worth the cost for you or the dealership.

We landed on a Toyato rav4. Our lease payments are WAY lower then they would be if we bought them. The total of our payments over 3 years is almost equal to the amount the car would automatically depreciate if you had bought it AND I have equity (yes, equity in a LEASE). Because I negotiated the Buy-Out price when I leased it, so my buy out price is Lower then I could sell it for when my lease is up. My plan is to buy it from the dealership and then sell it for more on carvana.

here is a link of cars you should lease vs buy https://www.realcartips.com/news/1384-better-to-lease-than-buy.shtml

Thank you! I am going to study this!

My car is dying (I’m a drive it into the ground person) and I have been vaguely thinking of leasing because mostly because I normally buy used and used cars are SO expensive right now. Maybe if I hold off a few years things will get better?

OTOH I live in the city so dings are inevitable. I don’t think I could live with that kind of pressure.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Your in luck, I have done a lot of research on this topic.

The answer isn't that Buying or Leasing is better -- because what it really comes down to is 1. What deal you can get (either buying or leasing), 2. Are you the type of person that will be willing to buy and hold on to a car until it dies or would you be likely to upgrade in 5-7 years? and most importantly 3. What brand car do you want to buy? (this is the key because some brands lease REALLY well - its all based on how much they depreciate)

Example --

I have a growing family. We are considering a Third kid in a few years but didn't want to lock into a a huge 3 -rower "just in case" . It seemed like leasing a car for 3 years and then reassessing our family needs when the lease runs up made the most sense to us. So --what should you lease? The answer is, which cars will most likely to keep their value (think honda, toyota, etc)? Dealerships do the math based on how much they will be able to sell the car for once your lease is up. If you buy a VW Atlas for example -- it depreciates significantly faster then say a highlander or a pilot. Therefore an Atlas lease wouldn't be worth the cost for you or the dealership.

We landed on a Toyato rav4. Our lease payments are WAY lower then they would be if we bought them. The total of our payments over 3 years is almost equal to the amount the car would automatically depreciate if you had bought it AND I have equity (yes, equity in a LEASE). Because I negotiated the Buy-Out price when I leased it, so my buy out price is Lower then I could sell it for when my lease is up. My plan is to buy it from the dealership and then sell it for more on carvana.

here is a link of cars you should lease vs buy https://www.realcartips.com/news/1384-better-to-lease-than-buy.shtml

Thank you! I am going to study this!

My car is dying (I’m a drive it into the ground person) and I have been vaguely thinking of leasing because mostly because I normally buy used and used cars are SO expensive right now. Maybe if I hold off a few years things will get better?

OTOH I live in the city so dings are inevitable. I don’t think I could live with that kind of pressure.

Are you me? I also have a 2010 that is getting near retirement age, and I’m considering leasing. But I’m worried about scuffing the paint, getting dings, or god forbid getting a small dent in the bumper. I also live in the city and these things happen. My 12 year old car looks it. I wonder how leases deal with this stuff?

[Anonymous]

As others have said it really depends on how long you like to keep your cars. I like to have a new car every three years and I think leasing is better than buying in that scenario. If you want to keep a car for 6 or more years you should definitely buy. Really any more than 3 years, you should buy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Your in luck, I have done a lot of research on this topic.

The answer isn't that Buying or Leasing is better -- because what it really comes down to is 1. What deal you can get (either buying or leasing), 2. Are you the type of person that will be willing to buy and hold on to a car until it dies or would you be likely to upgrade in 5-7 years? and most importantly 3. What brand car do you want to buy? (this is the key because some brands lease REALLY well - its all based on how much they depreciate)

Example --

I have a growing family. We are considering a Third kid in a few years but didn't want to lock into a a huge 3 -rower "just in case" . It seemed like leasing a car for 3 years and then reassessing our family needs when the lease runs up made the most sense to us. So --what should you lease? The answer is, which cars will most likely to keep their value (think honda, toyota, etc)? Dealerships do the math based on how much they will be able to sell the car for once your lease is up. If you buy a VW Atlas for example -- it depreciates significantly faster then say a highlander or a pilot. Therefore an Atlas lease wouldn't be worth the cost for you or the dealership.

We landed on a Toyato rav4. Our lease payments are WAY lower then they would be if we bought them. The total of our payments over 3 years is almost equal to the amount the car would automatically depreciate if you had bought it AND I have equity (yes, equity in a LEASE). Because I negotiated the Buy-Out price when I leased it, so my buy out price is Lower then I could sell it for when my lease is up. My plan is to buy it from the dealership and then sell it for more on carvana.

here is a link of cars you should lease vs buy https://www.realcartips.com/news/1384-better-to-lease-than-buy.shtml

Thank you! I am going to study this!

My car is dying (I’m a drive it into the ground person) and I have been vaguely thinking of leasing because mostly because I normally buy used and used cars are SO expensive right now. Maybe if I hold off a few years things will get better?

OTOH I live in the city so dings are inevitable. I don’t think I could live with that kind of pressure.

Used car prices fell by 3% last month. We may have passed the high point.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Your in luck, I have done a lot of research on this topic.

The answer isn't that Buying or Leasing is better -- because what it really comes down to is 1. What deal you can get (either buying or leasing), 2. Are you the type of person that will be willing to buy and hold on to a car until it dies or would you be likely to upgrade in 5-7 years? and most importantly 3. What brand car do you want to buy? (this is the key because some brands lease REALLY well - its all based on how much they depreciate)

Example --

I have a growing family. We are considering a Third kid in a few years but didn't want to lock into a a huge 3 -rower "just in case" . It seemed like leasing a car for 3 years and then reassessing our family needs when the lease runs up made the most sense to us. So --what should you lease? The answer is, which cars will most likely to keep their value (think honda, toyota, etc)? Dealerships do the math based on how much they will be able to sell the car for once your lease is up. If you buy a VW Atlas for example -- it depreciates significantly faster then say a highlander or a pilot. Therefore an Atlas lease wouldn't be worth the cost for you or the dealership.

We landed on a Toyato rav4. Our lease payments are WAY lower then they would be if we bought them. The total of our payments over 3 years is almost equal to the amount the car would automatically depreciate if you had bought it AND I have equity (yes, equity in a LEASE). Because I negotiated the Buy-Out price when I leased it, so my buy out price is Lower then I could sell it for when my lease is up. My plan is to buy it from the dealership and then sell it for more on carvana.

here is a link of cars you should lease vs buy https://www.realcartips.com/news/1384-better-to-lease-than-buy.shtml

Thank you! I am going to study this!

My car is dying (I’m a drive it into the ground person) and I have been vaguely thinking of leasing because mostly because I normally buy used and used cars are SO expensive right now. Maybe if I hold off a few years things will get better?

OTOH I live in the city so dings are inevitable. I don’t think I could live with that kind of pressure.

Are you me? I also have a 2010 that is getting near retirement age, and I’m considering leasing. But I’m worried about scuffing the paint, getting dings, or god forbid getting a small dent in the bumper. I also live in the city and these things happen. My 12 year old car looks it. I wonder how leases deal with this stuff?

DP. Same issue here. Old car is dying and we also have a unique situation where we may only need a second car for a couple years, but we have a huge oak tree out front and no garage, so it impossible to avoid the tiny dings. So I don't think we could keep a leased car looking nice enough. Trying to find a used one but its so hard right now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Your in luck, I have done a lot of research on this topic.

The answer isn't that Buying or Leasing is better -- because what it really comes down to is 1. What deal you can get (either buying or leasing), 2. Are you the type of person that will be willing to buy and hold on to a car until it dies or would you be likely to upgrade in 5-7 years? and most importantly 3. What brand car do you want to buy? (this is the key because some brands lease REALLY well - its all based on how much they depreciate)

Example --

I have a growing family. We are considering a Third kid in a few years but didn't want to lock into a a huge 3 -rower "just in case" . It seemed like leasing a car for 3 years and then reassessing our family needs when the lease runs up made the most sense to us. So --what should you lease? The answer is, which cars will most likely to keep their value (think honda, toyota, etc)? Dealerships do the math based on how much they will be able to sell the car for once your lease is up. If you buy a VW Atlas for example -- it depreciates significantly faster then say a highlander or a pilot. Therefore an Atlas lease wouldn't be worth the cost for you or the dealership.

We landed on a Toyato rav4. Our lease payments are WAY lower then they would be if we bought them. The total of our payments over 3 years is almost equal to the amount the car would automatically depreciate if you had bought it AND I have equity (yes, equity in a LEASE). Because I negotiated the Buy-Out price when I leased it, so my buy out price is Lower then I could sell it for when my lease is up. My plan is to buy it from the dealership and then sell it for more on carvana.

here is a link of cars you should lease vs buy https://www.realcartips.com/news/1384-better-to-lease-than-buy.shtml

Thank you! I am going to study this!

My car is dying (I’m a drive it into the ground person) and I have been vaguely thinking of leasing because mostly because I normally buy used and used cars are SO expensive right now. Maybe if I hold off a few years things will get better?

OTOH I live in the city so dings are inevitable. I don’t think I could live with that kind of pressure.

Are you me? I also have a 2010 that is getting near retirement age, and I’m considering leasing. But I’m worried about scuffing the paint, getting dings, or god forbid getting a small dent in the bumper. I also live in the city and these things happen. My 12 year old car looks it. I wonder how leases deal with this stuff?

DP. Same issue here. Old car is dying and we also have a unique situation where we may only need a second car for a couple years, but we have a huge oak tree out front and no garage, so it impossible to avoid the tiny dings. So I don't think we could keep a leased car looking nice enough. Trying to find a used one but its so hard right now.

Depends on how many and what size the dents are. Google lease return instructions for the manufacturer you are looking at - they all are a little different but basically has to do with how many dings or scratches, how big and how many per panel. You probably are still better off leasing a new car and dealing with any damage at return than buying a used car.