Lease vs. buying a new car
- Thread starter roadie1
- Start date
I've done both.
lease: low down payment (still about 2K), small monthly payment, you pay for this low
"investment" by committing to leasing forever on all your future cars. but your
maintenance costs are minimized if the warranty period exceeds the lease term.
buying: you keep cars forever, you do more than the 10K miles (max for leasing) per year,
you have 10K down payment to keep monthly payments down, and/or can afford to
pay over 60 months. you may wish to consider extended warranty policies on the
high-maintenance cost cars.
depending on the car, buying means at some point your payments stop, and if your
car can last, the overall costs overall are low.
since you are in a salt zone for at least 3 winter months, I'd research whether the
Ford has built-in rust proofing or can be added. I travel a lot and see loads
of cars that don't have any such protection and once it starts...
lease: low down payment (still about 2K), small monthly payment, you pay for this low
"investment" by committing to leasing forever on all your future cars. but your
maintenance costs are minimized if the warranty period exceeds the lease term.
buying: you keep cars forever, you do more than the 10K miles (max for leasing) per year,
you have 10K down payment to keep monthly payments down, and/or can afford to
pay over 60 months. you may wish to consider extended warranty policies on the
high-maintenance cost cars.
depending on the car, buying means at some point your payments stop, and if your
car can last, the overall costs overall are low.
since you are in a salt zone for at least 3 winter months, I'd research whether the
Ford has built-in rust proofing or can be added. I travel a lot and see loads
of cars that don't have any such protection and once it starts...
kray
HE>i
Depends on your situation and wants. Bob did a good job of basic differences although you can lease at 12k & 15k miles per year. Technically if you do your lease right you should put no money down, just pay first months and fees. Also the best deals you will find to lease are generally not make/model specific. Meaning if you look around at different makes/models tremendous saving can be had.
I lease because I like having a new car every 2-3yrs and always covered under warranty. I have a fully loaded BMW X1 $48k, paid first month/fees/taxes ~$1500 and at $360/month 36 months 10k miles/yr
If you’re interested in leasing or learning how to “lease hack” check out leasehackr.com forum
I lease because I like having a new car every 2-3yrs and always covered under warranty. I have a fully loaded BMW X1 $48k, paid first month/fees/taxes ~$1500 and at $360/month 36 months 10k miles/yr
If you’re interested in leasing or learning how to “lease hack” check out leasehackr.com forum
I've stuck to buying used cars lately. Much more affordable and I can still get a long, useful and trouble-free life out of them. I've leased a few times in the past also, and don't regret it either--they work well in certain situations. Leases seem better for someone who drives fewer miles (usually 12,000/year or less, although you can get 15,000 mile leases) and wants a new car every few years while still keeping the monthly cost more affordable than buying. I can't lease--I put 20-25k miles on each year, and I don't care to own the latest and greatest...except five or more years down the road, when it's more affordable. 
A drawback to leasing is that if the car has anything beyond normal wear and tear, or has damage, you will end up paying for it. (Document everything! My ex's last Nissan was rusting underneath the trunk lid, and was told by the dealer that 1) the problem is common and 2) Nissan won't pay to fix it. I think she got it in writing so it wouldn't be thrown back at her when she turned it in.) Road rash, door dings, etc. likely could cost money at turn-in time.
Also, some dealers will encourage you to turn in a lease early, and then end up rolling some of that cost of the old lease into your new one. It's too easy to get caught up in.
A drawback to leasing is that if the car has anything beyond normal wear and tear, or has damage, you will end up paying for it. (Document everything! My ex's last Nissan was rusting underneath the trunk lid, and was told by the dealer that 1) the problem is common and 2) Nissan won't pay to fix it. I think she got it in writing so it wouldn't be thrown back at her when she turned it in.) Road rash, door dings, etc. likely could cost money at turn-in time.
Also, some dealers will encourage you to turn in a lease early, and then end up rolling some of that cost of the old lease into your new one. It's too easy to get caught up in.
Shadowdog
Super Member
Leasing is basically renting, but I guess if you want new every few years you will always have payments. Dealers love leasers and ones that make payments to them with their loan plans!
You can save hundreds of thousands of $ over your lifetime by buying good used vehicles and looking after it so you will get many years/miles out of it. Many do this & the money saved is invested in their home , real estate , mutual funds etc.
You can save hundreds of thousands of $ over your lifetime by buying good used vehicles and looking after it so you will get many years/miles out of it. Many do this & the money saved is invested in their home , real estate , mutual funds etc.
Last edited:
c5corvette
Well-Known Member
Leasing is your best option if you:
1. Don't mind payment each month
2. Like to drive new vehicle every 3 years
3. Want piece of mind that factory warranty covers length of lease(no out of pocket repair cost).
4. Average about 12K miles per year.
Dealers do not necessarily make larger profit on leased vehicles. Negotiate your best price, then have lease payment calculated. They like to lease in hopes of seeing you again in 3 yrs.
Leasing is a mystery to most folks, but rather simple. Payments are based on depreciation. Estimated depreciation amount/36months+ tax, fees, and interest. The higher the residual, the lower payment. This said, if you elect to lease, shop for makes/models with high residual values. Imports have better residuals than domestics.
Lease is based on a capitalized cost a/k/a "cap cost". One major reason that leases are usually a worse deal is that few buyers understand the cap cost is every bit as negotiable as the price for an outright purchase. Also there are charges for "excessive mileage" and "excessive wear and tear" that would not otherwise apply to a purchase. These items are all negotiable but many simply assume that monthly "advertised" lease payments are etched in stone and are often ill-equipped to navigate the maze of all the different factors that come into play.
Usually best to negotiate the best deal on outright purchase, then shop lenders for the best financing terms - which may be favorable compared with that of the selling dealer. So called "0%" financing incentives usually means paying close to sticker price rather than getting a discount - so it's really not 0% since its factored into the price. I've known buyers to have a lower monthly payment by obtaining their own financing @ 4% on a (lower) negotiated outright purchase price than the payment would have been under so-called "0%" financing.
Usually best to negotiate the best deal on outright purchase, then shop lenders for the best financing terms - which may be favorable compared with that of the selling dealer. So called "0%" financing incentives usually means paying close to sticker price rather than getting a discount - so it's really not 0% since its factored into the price. I've known buyers to have a lower monthly payment by obtaining their own financing @ 4% on a (lower) negotiated outright purchase price than the payment would have been under so-called "0%" financing.
FastG
Active Member
All the above point was good, but a key issue is,
can you budget you mileage accurately? If you do not hit your estimate you giving money to the lease company, if your going to exceed your mileage you will either have to pay a penalty (you do not want to do that), or stop using the car for say the last 2 months. So being able to come up with a accurate estimate is curtail. I remember one deal a customer had a 40k lease, they had 100k on the vehicle at 25 cents per mile, it was going to cost them $15,000 to return the vehicle.
Mileage itself in not an issue, high mileage leases are actually cheaper per mile because the residue value is less.
Graham
can you budget you mileage accurately? If you do not hit your estimate you giving money to the lease company, if your going to exceed your mileage you will either have to pay a penalty (you do not want to do that), or stop using the car for say the last 2 months. So being able to come up with a accurate estimate is curtail. I remember one deal a customer had a 40k lease, they had 100k on the vehicle at 25 cents per mile, it was going to cost them $15,000 to return the vehicle.
Mileage itself in not an issue, high mileage leases are actually cheaper per mile because the residue value is less.
Graham
savatage1973
Addicted Member
This does not just apply to leases. Trust me, a dealer will gladly find a way to pay off an existing loan on a purchased vehicle, and roll the negative equity into the new loan on a new car. For both loans and leases, the dealers start hounding you at every scheduled maintenance interval.
FastG
Active Member
62caddy your correct, but is the high cost is because of high mileage allowance, if you divide the total lease payment by the allowed mileage the cost per mile is less. I actually did a 2 day Toyota corporate class on leasing, when they wanted to increase there leasing market share. We especially pushed the company leasing because of there ability to budget better and the higher average mileage it was a good deal.
Graham
Graham
I buy used cars and drive them into the ground. I pay cash and don't have a loan. I do my own work, too. Cars are appliances to me, but I enjoy driving/travelling. My current car is a 2003 Focus wagon I paid $3500 7 years ago with 114,000 miles on it, now it has 250,804 on it and runs well.
I usually buy Fords, but they rust here in Michigan, especially rocker panels. Rust killed my 1993 Explorer, 2002 Taurus and will kill my 2003 Focus most likely before the drive train requires attention.
I usually buy Fords, but they rust here in Michigan, especially rocker panels. Rust killed my 1993 Explorer, 2002 Taurus and will kill my 2003 Focus most likely before the drive train requires attention.
c5corvette
Well-Known Member
Agreed. Appears we have at least 2 "cardogs" in this thread
To the OP. Just looked up residual on 2019 Ford Explorer XLT. 52%.
kray
HE>i
But you’ll know that % before you lease. Like I mentioned before, You can get amazing deals on lease if you don’t hold yourself to a specific model. The best deals of all are on demo/executive models with less than 5000 miles.
I’ve seen 1 payment leases, $6-7k for 3yrs with all incentives. Lease hacking is definitely out there.
But if you can keep 1 car for 5+ years a good used deal will work better for you.
Oh, definitely. My ex did that a couple of times before she transitioned back to leasing.
roadie1
Super Member
Exactly what my brother in law said. I'm for sure a low mileage driver. My 2016 Tucson has 4400 on it. I've been mulling this over this over and will decide tomorrow. I'm looking at a Santa Fe or an Explorer. The Ford salesman said with my numbers and the low mileage I could get anything on the lot I want.
I just want a bigger, roomier cockpit and that feels more stable. Also, at highway speeds you do not want to give a quick tug to the steering wheel. Twitchy for sure. ……….
Harvestor
Addicted Member
I know somebody that spends about $45,000 to $55k every 5 years or so cash.
And puts about 18,000 miles a year on the vehicle. ...
At one point I had figured in their mileage for a lease with all costs and they be well over 50% of head of the game at the end of 10 years of Leasing versus buying...
That's more money in their pockets..
No cost for tires and brakes..etc
Figure out a 10 or 15 year period Of time and what your total cost would be purchasing a new vehicle every few years versus Leasing and saving on maintenance cost as well
At the end of that 10 or 15 year period which one allows you to have more in your savings account
If you're purchasing used the Gap closes depending on how old the vehicle is
And puts about 18,000 miles a year on the vehicle. ...
At one point I had figured in their mileage for a lease with all costs and they be well over 50% of head of the game at the end of 10 years of Leasing versus buying...
That's more money in their pockets..
No cost for tires and brakes..etc
Figure out a 10 or 15 year period Of time and what your total cost would be purchasing a new vehicle every few years versus Leasing and saving on maintenance cost as well
At the end of that 10 or 15 year period which one allows you to have more in your savings account
If you're purchasing used the Gap closes depending on how old the vehicle is
Last edited:
