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

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.

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.

You have to decide how long you want to keep the car. You are paying interest in either situation, leases are very easy since you just drop it off at the dealer at the end of the lease term.

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.

Anonymous wrote:

Anonymous wrote:Many people look at the most they can afford to buy. Then they find the most expensive lease that costs that much. Many people leasing BMW's can only afford to buy a Chevy.

This might be true in some places, but not in the UMC areas. And the top Chevy is 6 figures.

+1. The only Chevies that I seen in my neighborhood are more expensive than the average BMW. A Tahoe is going to be around 70k (no-one has a 2wd Tahoe with cloth seats around here) and a Suburban will about 10k more. The only other Chevies that we see are a could of C8s which are second cars spec'd up to at least 100k.

Anonymous wrote:Many people look at the most they can afford to buy. Then they find the most expensive lease that costs that much. Many people leasing BMW's can only afford to buy a Chevy.

This might be true in some places, but not in the UMC areas. And the top Chevy is 6 figures.

Anonymous wrote:

Anonymous wrote:There's zero chance I would be a gas car today - if you aren't ready to purchase an EV, a lease is a good way to get you a car somewhat temporarily until EV's are more available.

I've come around to this notion recently as well. Bought a gas car in 2019 and that will be my last. Planning hold until EVs are more available and then make a move.

The premium for even a hybrid still isn't worth it from a cost perspective. Buying either and EV or hybrid is an environmental statement, but any gas savings are swamped by the premium that you will pay for hybrid/ev.

Many people look at the most they can afford to buy. Then they find the most expensive lease that costs that much. Many people leasing BMW's can only afford to buy a Chevy.

Anonymous wrote:

Anonymous wrote:There's zero chance I would be a gas car today - if you aren't ready to purchase an EV, a lease is a good way to get you a car somewhat temporarily until EV's are more available.

I've come around to this notion recently as well. Bought a gas car in 2019 and that will be my last. Planning hold until EVs are more available and then make a move.

This is our strategy. DH will need a new car in a year, but we think the EV tech will change in the next few years with more and more companies pushing for 50%+ EVs. So, we might lease an EV or hybrid car for 3 years and then see what the market looks like after.

Anonymous wrote:There's zero chance I would be a gas car today - if you aren't ready to purchase an EV, a lease is a good way to get you a car somewhat temporarily until EV's are more available.

I've come around to this notion recently as well. Bought a gas car in 2019 and that will be my last. Planning hold until EVs are more available and then make a move.

There's zero chance I would be a gas car today - if you aren't ready to purchase an EV, a lease is a good way to get you a car somewhat temporarily until EV's are more available.

I’ve always found if you are going to keep your car more than 5 years it is a better deal to buy. Your choice of car is a bigger impact than lease vs buy. Sometimes you may have dealer incentives that make it more cost effective to go one direction or the other.

Leasing allows you to drive a more expensive car than you’d want to by buying.

The payments are often less and you don’t have to spend money maintaining a car. You can drive a new car every few years.. BUT you never get rid of payments. The first lease seems like a wonderful deal. Then you go into your second lease and you don’t receive any money back for the car you’re turning in. You also have to continue having car payments.

A much more prudent decision is to BUY a car and take on a 3-4 year loan followed by 3-4 years of NO car payments.

The exception is if you’re leasing for your job OR you have so much money that it doesn’t matter to you. But if you’re the typical MC/UMC family, it doesn’t pay off in the long term to lease.

Anecdotally, the families who lease are big spenders in general. They are truly convinced leasing is better financially.

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.

I don’t know why I absorbed the notion at some point that the best thing to do in terms of cost per mile is to buy a car new with cash and then maintain and drive it for as long as possible. But I’ve never actually sat down and done the math. I understand that even if you average the maintenance, the cost of gas and the performance of the market, inflation etc over two given periods can change the outcome. But is there a rule of thumb?