New Car: Rent vs. Lease

[monarch64]

Renting/leasing is just another option, a means to an end. I don''t understand how it automatically SAYS SOMETHING about a person or their character. I''ve never leased but if it made sense to do so I would.

Example: my cousin saved money all through junior high and high school and bought himself a really nice truck when he was 17. He went to college but came home every weekend, and that was a 180 mile RT, plus fuel costs for a larger utility vehicle. He leased a Honda Accord. Saved him money on fuel, wear and tear on his truck, easier to park, etc. Doesn''t sound like someone who just couldn''t afford to buy something really nice or who was living beyond his means, now does it? Nope. Sounds like someone pretty responsible at a relatively young age to me.

OP: since spring is here, do you guys absolutely HAVE to have a car right now or can you make it around using public transportation, etc. until you really explore your options? $1500--I wouldn''t fix your car but sell it for parts or whatever you can get out of it, maybe even look into donating it if the tax write off would be a bigger benefit. I wouldn''t lease because you HAVE to. If you have the luxury of time, I''d save up more money and try to buy another used vehicle for under $5k.

 

[kenny]

I think it is important to look at something which is only slightly off-topic.
The prevalent way of thinking is this:
If you hold an opinion based on some rational, then by default you must believe that this rational and the resulting conclusion applies to everyone.

I strive to avoid this way of thinking.

In this case I reason that if you run the numbers leasing costs more overall.
In my mind cost is the deciding factor.

Others reason that leasing is easier.
Perhaps they don't like the negotiating process for buying a car.
Perhaps they like the idea that they are not pulling out their credit card again when it is time to do maintenance.
Perhaps they feel more free and less tied down to a car they do not own.
Perhaps they don't want to hassle selling it or feeling the pain of loosing thousands of dollars trading it in (instead of selling private party and inviting strangers over) for another new car.

Whatever.
They don't owe me any explanation.

They have a right to their reasons for their perception of leasing.
Their reasons don't match mine.
That's fine.

I think what surprises people is I believe it is possible to discuss a subject and present reasons for your perspective without it meaning you are working to convert people to share your conclusions.
Reasons don't win, they just coexist.
So often people get offended when presented with opinions or reasons that don't match theirs. (Example: eye-clean is the correct threshold, why pay for what you can't see?)

There is this idea out there that there exists one external truth to be arrived at, and when you do it applies to everyone.
Superior reasoning conquers inferior reasoning ala Debating101.
This works in stuff like math, but it is too widely applied to other stuff.

Some people like leasing.
Some people don't.

Neither is wrong.

 

[that_someone_special]

Good point.

It just is, what it is.

As a side note: I also have an 09 focus (grey, but I wanted blue

). It was just under $19k. We put a few thousand down, and with the incentives at the time we got the car for a steal. Our payments are about half of what you stated above as well. That''s funny!

I do agree- a focus is NOT a family car. There is no darn room in the back. FI is tall and has to put the seat back all of the way to drive it. I wish I would''ve gotten the fusion instead.. but oh well.

 

[Rachel9]

My original post got eaten.....OK this is just my opinion.
No down payment, umbrella policy, new car to show your friends every couple years sound like a good song, but you are still paying depreciation for something is not yours & you must keep the vehicle impeccable.
The difference between leasing vs buying my current car is $241 {!} but I am working towards an asset.
The company I once worked for used to short lease 21 cars, cheaper due to volume & deductible. People with money lease for a very short time as try outs then order 'the one' with all the trimmings and pay in full, that's why they have money in the first place

 

[Dancing Fire]

no matter buying or leasing somebody is paying for the new car depreciation and guess who is paying?

but in the case of leasing you just paid for ever.

 

[PumpkinPie]

I would never lease a car. I don''t have a vehicle but my husband bought a 4 year old car with cash from a private seller. That was the cheapest and most reasonable option for us (and we did our due diligence so there was little risk).

 

[megumic]

Thanks all for your input! It''s interesting to see how others approach this debatable topic.

To respond to some questions:
- even if we make this fix, there are other looming fixes that will need to be fixed at some unknown point
- we live in the suburbs so we need a car, but mostly use it on weekends only since we live close enough to walk to the train station for our commute
- in three-years time we''ll likely need a car that suits a car seat (or two!), which is not what we need at the moment
- we "have" the cash down payment for a new car to buy, but then would have to go into debt for a portion of our wedding
- currently we are a one-income couple, since I am a law student, but by summer 2011, we''ll (hopefully!) be a two-income family

Overall, although leasing is less of a financially smart move in our minds because we truly like to drive cars into the ground, we feel that leasing will allow us the security of a dependable vehicle that will be fixed at no cost to us if necessary, low monthly payments, no wedding debt, and the flexibility to re-assess our car situation in three years (when hopefully two will be three or four!) Leasing seems like a temporary fix for this period of our lives, would you agree?

 

[karpouzi]

Date: 4/13/2010 2:34:04 PM
Author: Rachel9


My original post got eaten.....OK this is just my opinion.

No down payment, umbrella policy, new car to show your friends every couple years sound like a good song, but you are still paying depreciation for something is not yours & you must keep the vehicle impeccable.

The difference between leasing vs buying my current car is $241 {!} but I am working towards an asset.

The company I once worked for used to short lease 21 cars, cheaper due to volume & deductible. People with money lease for a very short time as try outs then order ''the one'' with all the trimmings and pay in full, that''s why they have money in the first place

Keeping it impeccable is the main reason I wouldn''t do it. Body work, especially, is so expensive! If my car got dented by a door or rear-ended or whatever I might choose not to fix it, but if it were a lease, I''d have to.

 

[pennquaker09]

I''m in the anti lease camp. And, like, DF said, only buy what you can afford.

 

[Tacori E-ring]

since you are asking for advice I still think you are better buying a used car and selling it if and when you need a larger vehicle.

 

[movie zombie]

Date: 4/13/2010 9:01:26 PM
Author: megumic
Thanks all for your input! It's interesting to see how others approach this debatable topic.

To respond to some questions:
- even if we make this fix, there are other looming fixes that will need to be fixed at some unknown point
- we live in the suburbs so we need a car, but mostly use it on weekends only since we live close enough to walk to the train station for our commute
- in three-years time we'll likely need a car that suits a car seat (or two!), which is not what we need at the moment
- we 'have' the cash down payment for a new car to buy, but then would have to go into debt for a portion of our wedding
- currently we are a one-income couple, since I am a law student, but by summer 2011, we'll (hopefully!) be a two-income family

Overall, although leasing is less of a financially smart move in our minds because we truly like to drive cars into the ground, we feel that leasing will allow us the security of a dependable vehicle that will be fixed at no cost to us if necessary, low monthly payments, no wedding debt, and the flexibility to re-assess our car situation in three years (when hopefully two will be three or four!) Leasing seems like a temporary fix for this period of our lives, would you agree?

making those fixes if/when they are needed is still less expensive than getting another car now. so, no, i don't agree.

i'd make those fixes and reaccess in three years.

but its not my $ so not my decision.

mz

 

[Amethyste]

I have purchased ( 3 weeks ago ) a car.
It is a 2005 and now, the transmission is starting to show signs of upcoming replacement.
I inquired and it will be about $2,500 to fix.

So, I am going to sell it ( and fully disclosing that it has this problem ) andI am going to
lease a car. The car I want has no limits on miles and for a 4 year term, all of my maintenance and fixes will
be picked up by the warranty. That is the thing that worries the most is to make a car payment and on top of that, to
pay for repairs, it is not something i want to do at all.

So from now on, I will be planning some sort of "car payment" forever in my budget. Cause even when you are done
paying off your loan, i bet you that over the course of an additional 2 - 3 years after that, you would come close to
about $200 a month in car repairs and other misc. things that goes with that.

I think from now on, I will only lease. I will return the car after 3-4 years and get another one. My life is stressful enough
than trying to pay for my car and on top paying for repairs and the worry that it'll kick the bucket when I am in a remote area
or whatever, leasing for me is probably going to be the best option for me.

I think that cars are the worst waste of money ever. The more you use them, the more they break down. To me, when yoy are making your last payment on your loan, yeah you own it. You also own an older car, with more mileage and more maintenance. It's just the way it is. I don't think it's an asset at all, it's an asset of potential problems. I do not know many people that keep the same car past 7-8 years. in our area here, winters are super hard and cars get beaten up a lot. after 7 - 8 years of useage in the North East, it's almost time to get something different. When I weight the pros and the cons between owning and leasing, leasing wins in my mind. I want an option that spells E-A-S-E on my life and worry free care. ... But that is my
opinion...

Good luck in your decison!!

 

[megumic]

Date: 4/13/2010 9:55:22 PM
Author: movie zombie

Date: 4/13/2010 9:01:26 PM

Author: megumic

Thanks all for your input! It''s interesting to see how others approach this debatable topic.


To respond to some questions:

- even if we make this fix, there are other looming fixes that will need to be fixed at some unknown point

- we live in the suburbs so we need a car, but mostly use it on weekends only since we live close enough to walk to the train station for our commute

- in three-years time we''ll likely need a car that suits a car seat (or two!), which is not what we need at the moment

- we ''have'' the cash down payment for a new car to buy, but then would have to go into debt for a portion of our wedding

- currently we are a one-income couple, since I am a law student, but by summer 2011, we''ll (hopefully!) be a two-income family


Overall, although leasing is less of a financially smart move in our minds because we truly like to drive cars into the ground, we feel that leasing will allow us the security of a dependable vehicle that will be fixed at no cost to us if necessary, low monthly payments, no wedding debt, and the flexibility to re-assess our car situation in three years (when hopefully two will be three or four!) Leasing seems like a temporary fix for this period of our lives, would you agree?

making those fixes if/when they are needed is still less expensive than getting another car now. so, no, i don''t agree.


i''d make those fixes and reaccess in three years.


but its not my $ so not my decision.


mz

All current "issues" that will eventually need fixing that are not quite to the point of desperation will total add up to more than $3k. The car is worth less than $5k. Do you still think it''s worth it?

Personally, it seems like (potentially, if and when these wear and tear things go...) we''re investing more money into something that continues to rapidly depreciate. KWIM?

 

[Dancing Fire]

Date: 4/13/2010 11:12:42 PM
Author: megumic

All current ''issues'' that will eventually need fixing that are not quite to the point of desperation will total add up to more than $3k. The car is worth less than $5k. Do you still think it''s worth it?

Personally, it seems like (potentially, if and when these wear and tear things go...) we''re investing more money into something that continues to rapidly depreciate. KWIM?

yes,

 

[Hera]

I would pay the car repair bill and consider your options again when you become a two income family.

 

[movie zombie]

Date: 4/13/2010 11:12:42 PM
Author: megumic



All current ''issues'' that will eventually need fixing that are not quite to the point of desperation will total add up to more than $3k. The car is worth less than $5k. Do you still think it''s worth it?

Personally, it seems like (potentially, if and when these wear and tear things go...) we''re investing more money into something that continues to rapidly depreciate. KWIM?

yes, i still think its worth it:

let''s see $3k v. many thousands for a lease with which i don''t have to worry about depreciation but at the end of which time i have a definite given amount of zero. so my thousands would have gone for what? use of the car? well, for $3k i can have the use of a car and not be out thousands....and while my repaired car may not be worth much at the end of 3 years, it might just might be worth more than zero.

sounds like you''ve decided to lease: watch the contract language. a friend of mine leased and at the end of the lease period still owed $.

mz

 

[kenny]

Cars can surely suck a lot of money out of you.

I think buying a new low-end Honda with high MPG, like the Fit for $15,000 and keeping it well maintained for 200,000+ miles gets you the most car for the money.
Hondas also retain great resale value.

Also after it is paid off keep making "payments" into a savings account so you can pay cash, or mostly cash, next time.

 

[megumic]

Now I''ve flipped back - now thinking of buying. The idea of spending what is close to $7k over three years and having nothing in the end truly seems wasteful. If we can scrounge a down-payment, or beg a parent for a loan, we might be able to pull it off. What a freaking pain! I would just fix the car we have, but the fear of further repairs being necessary in the near future that we don''t have the cash capital for right now loom in my mind. Yuck.

 

[NewEnglandLady]

Date: 4/14/2010 2:42:19 PM
Author: megumic
Now I've flipped back - now thinking of buying. The idea of spending what is close to $7k over three years and having nothing in the end truly seems wasteful. If we can scrounge a down-payment, or beg a parent for a loan, we might be able to pull it off. What a freaking pain! I would just fix the car we have, but the fear of further repairs being necessary in the near future that we don't have the cash capital for right now loom in my mind. Yuck.

For $3K in repairs, it seems like you would be having a lot done, no? We had our whole engine checked over, belts replaced, new clutch put in, etc. and it was less than half of that. How many miles are on the car?

Our car was only worth $1,500 two years ago when somebody ran a stop sign and hit us. Our insurance company estimated the damage to be around $2K, so they considered our car to be totaled, wrote us a check and that was it. We had been planning on buying a car at that point (at the time our car had about 150K miles on it and we didn't know how much time we had left), so we had the money for a new (used) car set aside. Instead of buying a new car, however, we paid to have the repairs done and have everything in the engined fixed that needed fixing, which did come out to be around $2K. The car has been going very strong ever since and our mechanic told us today that it's in great shape (just had the belts tightened). Anyway, my point is that if you spend $3K right now, you're likely going to be getting several years worth of driving out of that. If you have a $250/month payment, however, you'll go through $3K in a year (and still be in debt).

 

[decodelighted]

This hurts my head. Leasing makes sense for some small business owners too -- but I forget how. I remember knowing once. Am senile? It would be nice to have an ooey gooey fresh new car but iz pretty happy with my 2005 Toyota Rav4 for now. I suppose the bank still owns some of it. Should check on that. Maybe they''ll wanna borrow it to go to Sam''s Club sometime on a weekend. As long as they pick me up some cases of Mexican Coke s''ok by me.

 

[Mara]

Date: 4/13/2010 9:02:13 PM
Author: karpouzi

Date: 4/13/2010 2:34:04 PM
Author: Rachel9


My original post got eaten.....OK this is just my opinion.

No down payment, umbrella policy, new car to show your friends every couple years sound like a good song, but you are still paying depreciation for something is not yours & you must keep the vehicle impeccable.

The difference between leasing vs buying my current car is $241 {!} but I am working towards an asset.

The company I once worked for used to short lease 21 cars, cheaper due to volume & deductible. People with money lease for a very short time as try outs then order ''the one'' with all the trimmings and pay in full, that''s why they have money in the first place

Keeping it impeccable is the main reason I wouldn''t do it. Body work, especially, is so expensive! If my car got dented by a door or rear-ended or whatever I might choose not to fix it, but if it were a lease, I''d have to.

Actually nowadays most leases offer you the option to add some type of ''insurance'' for about $500 that covers things like this. Small dents, dings, sometimes windshield holes, as well as internal wear and tear etc, sometimes they have a cap that it covers, I think our old one was up to $5k in work that it would need before we had to pay.

 

[geckodani]

Date: 4/14/2010 8:05:25 PM
Author: Mara

Date: 4/13/2010 9:02:13 PM
Author: karpouzi

Keeping it impeccable is the main reason I wouldn''t do it. Body work, especially, is so expensive! If my car got dented by a door or rear-ended or whatever I might choose not to fix it, but if it were a lease, I''d have to.

Actually nowadays most leases offer you the option to add some type of ''insurance'' for about $500 that covers things like this. Small dents, dings, sometimes windshield holes, as well as internal wear and tear etc, sometimes they have a cap that it covers, I think our old one was up to $5k in work that it would need before we had to pay.

I''ve only ever had leased vehicles, and even the general policy covers most dings, dents and scratches, as long as they are under a certain size (a dollar bill I think). You get a little checklist of acceptable damage. I''ve turned in leases with some serious dings and whatnot.

Life happens, LOL.

 

[Rachel9]

True Mara but that is just adding more sauce into an empty pot, dents/6" minors [depending on the make] are usually fixed by them=not cheap, most of the time they hit you with tires upon returning process, my tires are $1,400 nothankyouverymuch

We can all agree that depreciation has to be paid, leasing or not. Unfortunately most of us like to change cars often, or like me...can't drive customers in smaller ones, buying gives me the opportunity to get some $ back

Glad you're reconsidering Megumic, if there is any chance of terminating a lease early [having a hard time paying] keep in mind that you'll be dealing with heavy penalties even if you transfer to a friend/family member it won't be for free. Good Luck

 

[Lulie]

I'm late on this thread and quite surprised no has mentioned higher insurance rates when leasing. Yep, we leased a few years back when step-son was still in HS and the other two nearly ate up that car

 

[megumic]

Just wanted to share...

We bit the bullet, came up with a small down payment, negotiated a solid turn-in on the POS, and we BOUGHT a new (for us!) car!!! It''s a certified pre-owned VW Passat with only 24k miles, and will be under warranty until 2013!!! WOOO HOOOOO! We actually were going for the Jetta, but realized if we were buying, that it makes sense to go bigger since we''re hoping to be TTC in less than one year

What''s great is, between the turn-in value and some money down, our monthly payments are less than that of a lease! Thanks everyone for your input - it has been a particularly stressful week and decision-making process, but we are happy with the result and glad to have a money-sucking car OFF OUR HANDS!

 

[Tacori E-ring]

meg, I am so happy for you! Enjoy your new car!!!

 

[zoebartlett]

I''m glad you made a decision! It''s fun buying a new (to you) car, isn''t it?

 

[onedrop]

Enjoy your new car!! We have a Passat also and are very pleased so far.

 

[Rachel9]

Glad to hear the good news, congratulations!

 

[kenny]

Congratulations.