Lease or Buy?
 

On some of the forums i read a lot of villagers lease their vehicles. At our ages 60-? does it pay to lease over buying? Especially for people who have the money and wish to have a new vehicle every 2-3 yrs. I know financial advisors always stress not to have debt but, if you really don't care and have no heirs why not spend your money!!

None of our financial guys ever stressed no debt. Especially when buying a car with zero % interest that has been offered on our last 6 cars.

Everyone will have to do the financial and situational calculations for themselves to determine if leasing a vehicle is "worth it" to them. We decided to lease as we can afford it, like the ability to choose a new car every 3 years, and most importantly shouldn't have to worry about any maintenance outside of wipers and oil changes. Something goes wrong, let the dealership handle it.

In my opinion, if you can pay cash for a vehicle, buy it. I never borrow money for anything, and I don't lease vehicles.

Leasing has always been a more expensive way to buy a car.

The only time it becomes a less-expensive way to buy a car, is when a manufacture convinces a 3rd party insurer, that the residual value of the vehicle, is going to be higher than expected.

Unless you have a tax situation that's going change the dynamic, "buying" is cheaper than "leasing", 99% of the time.

That said, if you figure you're going to be making a auto-loan payment for the rest of your life, "leasing" will get you more car for your monthly payment. You can drive a Buick, for a Chevrolet payment.

"Cash outlay" is different than "expense" (or "cost").

I agree. I have never made a car loan payment or lease payment in my life. When I couldn't afford a new car, I bought a used one. Like some car guy used to say, "drive a used car, everyone does".

I like just paying cash for new cars. Keeps the transaction simple and I don't like monthly payments.

Leasing may be a more expensive way to buy a car, but paying cash seems to be a more expensive way to drive a new car every 36 months.

The details are going to matter a lot but:
- If I purchase a $50K car today and then trade it in for maybe $30K in Jan. 2028 it has cost me $20K + tax
- If I lease a $50K car at $500/month then in 36 months it has cost me $18K

There will be other fees for both leasing and purchasing
If I purchase a car I will likely keep it more than 36 months
I drive too many miles for a lease at this time, but when my high-mileage years are over I will be looking into a lease

IMO leasing is like credit card debt you never get rid of it. IMO same can be compared to renting house or buying it. Renting always cost more but with less headaches.

You have to ask yourself if you drive enough miles (to need a nice car) and if it matters that you arrive at the new Hooters being seen in a newer car or not? I have a 2010 foreign model purchased in 2015 now it’s 2025 so 15 years old. I only change the oil once a year now due to synthetic oil and lower miles driven. Most cars today only need brakes and oil changes (1 year or ~10,000 miles) as most fluids are high mileage or not changeable (some transmissions). IF I really needed a car to go to the Midwest or any long distance I might rent one for piece of mind. If you have extra cash put it in the house it won’t depreciate as fast. With all the posts about people dealing with “stealerships” (see the current Kia thread going) I have little desire to interact with any dealership.
Edit: I rent a car a few times a month for work and the new(er)cars are IMO packed with too much distracting technology. Putting the HVAC in the infonet screens is way to much distraction to just turn up/down the air. When I come home and get in the 2010 I do not miss the new car.

Counting only depreciation, tax, title, dealer's fees, etc., it typically costs us $2000 - $2300 per year to own a mid size SUV, trading it anywhere from 4 years to 10 years. Between up front costs and monthly costs, I don't believe you can lease a similar car for that.

Your 4-year cost is $9,200
Tax on a $50K vehicle is $3,000
If dealer fees and others come to $200 then your depreciation over 4 years is $6,000 or 12%.
You would buy the $50K vehicle, drive it for four years, then sell it for $44K.

12% is really good. A couple of makes I checked had 4-year depreciations of 24% and 36%

I refuse to pay any dealer fees. Never have, never will.

2 different animals, IMO

Houses typically appreciate, automobiles don't.

When you buy a car, you're purchasing the ice cube and if you keep it frozen, it will continue to do its job.

When you lease a car, you're paying for the melting + the premium that goes with managing the process.

Same maintenance and Warranty when you purchase so that benefit is a push.