Buy or Lease, and for how long?

**Broken Arrow** · 10-05-2006, 01:07 PM

Re: Buy or Lease, and for how long?

Generally:

Lease = Bad
Buy = Good

I've never leased, and I'm not the type where a lease would benefit me in any way.

**creditcardfree** · 10-05-2006, 01:20 PM

Re: Buy or Lease, and for how long?

I leased once for two years for about $132/mo. Overall, it was good situation, but we didn't like having to change cars (and payments) that frequently and then having nothing to show for it in the end.

Now we buy used vehicles and keep them for 5 years or more. We also pay them off as quick as possible. The one of our last cars we had for 7 years...and an accident caused us to get a new one...otherwise it was fine.

**Ima saver** · 10-05-2006, 01:31 PM

Re: Buy or Lease, and for how long?

I have always heard that leasing vehicles is a bad thing to do. I usually keep my cars for a while after I pay them off. When they start giving me trouble, we trade them in.

**disneysteve** · 10-05-2006, 05:04 PM

Re: Buy or Lease, and for how long?

We buy gently used (1-2 years old) and keep them for 8-10 years.

Leasing makes no sense in the vast majority of cases. I know someone who recently took a 6 year lease which is really insane.

**tabbycat31** · 10-05-2006, 09:13 PM

Re: Buy or Lease, and for how long?

I bought my car new in 1999 and I'm still driving it 115K miles later. I'll stick with new (my family objects to used cars... long story).

Leasing is stupid... and I drive too many miles for a lease anyways.

**brianpalmer** · 10-06-2006, 12:52 AM

Re: Buy or Lease, and for how long?

lease is convenient if you run a business and can deduct taxes from it. Otherwise is an unnecessary expense and you are left with nothing at the end

**bjl584** · 10-06-2006, 03:11 AM

Re: Buy or Lease, and for how long?

Yes, I can see where there may be tax benefit to leasing if you own a business, however I thought that it was possible to write off expenses on a vehicle for a business even if you owned it? (Maintenance, gas, registration, inspection, etc.) I also thought that you could take depreciation on it like you can on real estate and other assets? Not sure, just wondering. But, leasing doesn't really seem to make much sense.

**disneysteve** · 10-06-2006, 04:31 AM

Re: Buy or Lease, and for how long?

Originally posted by bjl584

But, leasing doesn't really seem to make much sense.

Leasing "makes sense", if you want to call it that, for people who insist on having a brand new car every 2 years, or for people who can't manage to save a downpayment, or for people who aren't satisfied buying the car they can afford and would rather rent a car they can't afford to buy.

Since this is a saving money website where we all preach frugality, you probably won't find much support for those behaviors around here.

**Gruntina** · 10-06-2006, 10:59 AM

Re: Buy or Lease, and for how long?

I wonder if people lease cars also for the reason is that they don't want to hassle with the breaking down or repairs? I know some people have the mentality that new cars do not break down like older cars when in truth they do but newer cars or lease are under warrantee?

**bjl584** · 10-06-2006, 11:10 AM

Re: Buy or Lease, and for how long?

Good point. I think that a lot of people are conditioned to think that once a car gets a few years old it is bound to start giving them problems. This was true 15 years ago or so, but the quality of automobiles has increased dramatically in recent years. I would say that a new car can be driven for a good 10 years before it starts to give you problems as long as it is properly maintained. That and the fact that a lot of people are unable to work on their own cars, and having a warranty is piece of mind.

**disneysteve** · 10-06-2006, 11:48 AM

Re: Buy or Lease, and for how long?

Originally posted by Gruntina

I wonder if people lease cars also for the reason is that they don't want to hassle with the breaking down or repairs? I know some people have the mentality that new cars do not break down like older cars when in truth they do but newer cars or lease are under warrantee?

I don't see where this would make sense. If you don't want an "old" car, buy a car that is 2 years old just off a lease. It will still be under warranty. You'll get it for about 25% less than a new one, and the rate of depreciation at that point is slower than when it was new. Keep it for 3-4 years and then resell it. You'll spend a lot less in the long run than leasing a new car every 2 years.

And I agree with bjl584. A good quality car properly maintained should easily last at least 100,000 miles. I bought my Camry with 11,000 miles in August 1998. I've now got 94,000 and have no plans to replace it anytime soon. I kept my last Camry for 127,000 miles and I'm sure whoever got it after me got many more good years out of it.

**MonkeyMama** · 10-07-2006, 05:05 AM

Re: Buy or Lease, and for how long?

Buy buy buy.

We do recommend in many cases our clients lease cars though - they often can get significant tax write-offs. When you are paying 50% in income taxes - fed and state - and you own a business - it might just make sense. But it is not always the more favorable option... more often than not buying still makes more sense.

**abowers** · 10-08-2006, 10:41 AM

Re: Buy or Lease, and for how long?

My fiance is driving a 1998 Toyota Avalon that hit 100,000 miles a couple months ago. It was his parents until a couple of years ago when his dad upgraded to a Corvette (after paying his last college tuition payment - with 3 kids!) My fiance's driving it at a rate of about 4000 miles a year (!!!) because he works 3 miles from our apartment, and we take the new car (under warranty, and better gas mileage) on any longer trips.

The new car: We bought a 2006 Focus this time last year, We put $3k down, and we financed the rest over 5 years, at 4.9%. I plan on driving it well beyond when it is paid off. I'll be done with grad school before the 5 years is up, and will probably end up paying it off a year early. I've put 9850 miles on it since we bought it last year.

So we'll be done paying off the Focus just in time for the Avalon to crap out and need to be replaced.

**dragonfly** · 10-08-2006, 09:21 PM

Re: Buy or Lease, and for how long?

i always heard about buying......

Buy or Lease, and for how long?