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Should You Lease or Buy Your Car?

Edmunds.comEdmunds.com Posts: 10,059
edited March 2017 in General
imageShould You Lease or Buy Your Car?

Weigh the pros and cons of leasing vs. buying a car to make the right choice when you finance your next vehicle.

Read the full story here


Comments

  • Yea they seemed kind of high. Both cars are fully loaded however.

    The big thing was the MSD program putting money in as a security deposit which would lesson the MF.

    The more I think about it, is it even worth it to lease these things or save so i can buy?
  • cheated49cheated49 Posts: 2
    edited February 2015
    Leasing is not always the lowest cost over buying. Lease costs can vary dealer to dealer. Many times you cannot get out of a lease without a penalty. I.E. If you suffer financial hardship; if after signing the papers you decide you would like a lower payment. Watch for financial companies needs before you sign. In other words, make them give you, for example, a written need for insurance coverage. Make sure the dealer shows you. Otherwise, you can sign the papers thinking your insurance is all set, only to have the finance company come back and claim you need more coverage. A higher cost out of your pocket. Research the true value of the vehicle you're looking for. Unfortunately, a lot of sales staff, hear your needs, understand your needs and try to "sell" you a higher priced vehicle than you intended!!
  • micevansmicevans Los AngelesPosts: 6
    I believe that leasing is better because you have the opportunity to find great deals that fit to your budget!
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 64,490
    There are other factors to consider though, in a lease. You have restrictions on what modifications you can do and the miles you can accrue; also you have to return the car pretty much as you got it, with say tires of the same type that are serviceable, and with no excessive damage of any kind. Also, you are locked into a lease, and they aren't easy to bail out of if you have to.
  • micevansmicevans Los AngelesPosts: 6
    Yes of course you have restrictions on modifications but I believe that every person has a different point of view ;) There are people that have absolutely no problem with that and other that would like to modify the car at their convenience.
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 64,490
    Well of course...but you'd be surprised how many people jump into leasing without considering those things.
  • micevansmicevans Los AngelesPosts: 6
    hm.. yes.. this is true..that's why we should post articles like this one so people are not confused..
  • For me personally I prefer to buy because I keep my car until dies. I love cars but I have only purchased 3 in my life. And because they depreciate so quickly I buy used. Leasing I think works well if you like having a new car every few years
  • wintersunwintersun Posts: 1
    Leasing only makes financial sense if one has a business and the GVWR of the vehicle is less than 6001 lbs and so does not qualify for Section 179 and so takes 11 years to fully write off the cost to buy the vehicle. With a lease the monthly payments are 100% tax deductible for a business on day one. For a private party the depreciation of 30% in the first 3 years of ownership with a new vehicle make it a dumb move to do this whether buying outright, financing the purchase, or leasing the vehicle.
  • MichaellMichaell ColoradoPosts: 124,680
    wintersun said:

    Leasing only makes financial sense if one has a business and the GVWR of the vehicle is less than 6001 lbs and so does not qualify for Section 179 and so takes 11 years to fully write off the cost to buy the vehicle. With a lease the monthly payments are 100% tax deductible for a business on day one. For a private party the depreciation of 30% in the first 3 years of ownership with a new vehicle make it a dumb move to do this whether buying outright, financing the purchase, or leasing the vehicle.

    I've leased plenty of vehicles.

    I like the fixed investment, always having a car under warranty, and being able to swap out for something new every 3 years.

    Leasing is just an alternative to traditional financing.

    If you keep your car forever, leasing does not make sense - we are buying my wife's Outback, which has 32,000 miles on it after 4 years. Will have less than 50K when it's paid off, and we already have about $6000 in positive equity in it.

    Did you get a good deal? Be sure to come back and let us know! Post a pic of your new purchase or lease!


    MODERATOR

    2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4

  • captartycaptarty nonePosts: 1
    Buying and keeping the car for as long as it serves as transportation.
  • beepajbeepaj Posts: 2
    How about older folks...leasing looks like a good option
  • pmw786pmw786 New York City / Nassau County Long IslandPosts: 9
    I’m in the market to purchase a home and begin a mortgage. Will leasing a car and having a hard pull on my credit as well as having a monthly payment for the next three years negatively affect the affordability or interest rates in purchasing a home? Should I buy a car instead if I’m able to to avoid having issues in purchasing a home?
  • MichaellMichaell ColoradoPosts: 124,680
    pmw786 said:

    I’m in the market to purchase a home and begin a mortgage. Will leasing a car and having a hard pull on my credit as well as having a monthly payment for the next three years negatively affect the affordability or interest rates in purchasing a home? Should I buy a car instead if I’m able to to avoid having issues in purchasing a home?

    A loan is a lease is a mark on your credit.

    If you can defer the loan or lease until after you close, that would be the best.

    Did you get a good deal? Be sure to come back and let us know! Post a pic of your new purchase or lease!


    MODERATOR

    2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4

  • becausecarbecausecar Posts: 9
    In my opinion, the big problem that I see in a lease is if you would have an accident.
  • kyfdxkyfdx Posts: 130,976

    In my opinion, the big problem that I see in a lease is if you would have an accident.

    That's the good part. You file an insurance claim and get it fixed properly, and when the lease is up, it is the bank's problem.

    Did you get a good deal? Be sure to come back and share!

    Edmunds Moderator

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