Buying vs. Leasing

[tommygun23]

I currently have a 2014 Ram 1500 that I am making monthly payments on, I am happy with the truck but the recent discussion regarding pickup shopping brought my attention to the 6.2L Chevy which sounds kind of fun, I definitely don't need a new vehicle but I am one that usually is always looking for the next best thing and I'd also like to trade while my current vehicle is half-assed nice as I live on a gravel road. Also, the short box kind of pisses me off. I currently make payments of a little over $400 for my pickup, and I was wondering how would it work if I moved into leasing a vehicle? Would the payment become cheaper? Is it even possible? I may not even go for the 6.2L the 5.3L may even work, I have a duramax that I usually pull with anyways. Would it make more sense for me to lease and cheapin up payments by leasing since I am already making them anyways? Oh the dilemmas of having too much time on my hands. Thank you

 

[martinslanding]

Leasing is usually only beneficial on vehicles that hold their value and that you do not put a lot of miles on…

 

[Jigaman]

I leased an SUV for my wife about 12 years ago and after it was done I felt like what a prostitute must feel like at the end of the night. I dont see myself ever doing it again.

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I get the attraction of always having a new vehicle but personally I buy them a couple years old and let someone else take the hit on depreciation and drive them until they have 100-130k and then start over.

 

[Bri-guy]

I leased a couple Toyota Tacoma's and it was a pretty good deal. They were usually worth more at the end of the lease than the buy-out, so I would turn them in to pay the down payment on a new one (and any miles I was over). They were too small for me, so I upgraded to an F-150. At the end of that lease I was over on miles and the truck was worth less than the buyout. Boy did that suck! So now I bought my F-150. Much higher payment, but I plan to keep this one so I'll be worth in in a couple more years.

Long story longer -- it can be a good deal but only if it's a vehicle that holds value for 2-3-4 years (depending on your lease) and you get a mile plan that you know you can keep under.

 

[johnr]

The last round of vehicles we purchased we bought new off the lot with all the options we wanted. Spent a bit more, but decided to try to get exactly what we wanted, and keep them for a longer time period. My pickup is a 2012, and still love driving it. Thinking I could keep this one indefinitely, as I have a little car I run for work and whatnot. Mrs johnr picked up a 2015 explorer with every option she was looking for, and was supposed to be the ten year plan, but I know her and am guessing this vehicle will be traded in a yr or two, as she gets anxious.

Leasing always seems like paying rent, and never owning it.

 

[701FishSlayer]

You'll never find a sales manager at a lot that owns one. They all lease, for a reason. But they all prolly live on pavement too. Gravel is going to chew a lease vehicle up. Leasing is the only way to never go upside down on a vehicle. If you can follow the mileage and turn the vehicle back in when the lease is up with no damage and good tires and a windshield do it. Looking at it from a pure asset/liability view of course. I own. I'm a financial tard.

 

[fnznfwl]

Leasing always seems like paying rent, and never owning it.

Thats exactly what it is.

If you buy a vehicle that holds its resale well and you don't put on many miles it can be ok. but if thats you, then buying is even better.

IMO only thing dumber than leasing is buying new every year or two and taking that ass whooping on depreciation just for the new car smell.

 

[martinslanding]

You'll never find a sales manager at a lot that owns one. They all lease, for a reason. But they all prolly live on pavement too. Gravel is going to chew a lease vehicle up. Leasing is the only way to never go upside down on a vehicle. If you can follow the mileage and turn the vehicle back in when the lease is up with no damage and good tires and a windshield do it. Looking at it from a pure asset/liability view of course. I own. I'm a financial tard.

The vehicle still needs to hold its value until the end of the lease…example: pretty much any Subaru, Honda Accord, Toyota 4runner…should all be worth more at the end of the lease…provided everything above happens too…but try this on a Chevy Tahoe, Dodge Durango or regular ½ ton pickup and you will owe money…so the upside/down doesn’t apply to all vehicles


We have bought new, leased and bought used.
I can honestly say for us gently used is the best option then dive it 5-6 years try keeping it under 100k for miles then trade it back in when it still has value…
…about the only benefit to buying new is you can usually get exactly what you want without any headache
…gently used ( a vehicle that’s 2-3 years old still under 30K miles) is out there, just a lot harder to find and find exactly what you want…if you are patient you will find the right deal
…lease…may work in some scenarios just not ours…and definitely pay attention to “all” the wording in the lease, come buy back time

 

[SDMF]

One needs to understand that there's no "getting ahead" when it comes to vehicles (except maybe collector cars if you have the $$, time and know-how). A vehicle is losing value every single day you own/lease it, even if you don't drive it that day.

Need to balance out the utility of what you absolutely need for basic transportation along with the extra you're willing to pay for creature comforts and entertainment/pleasure during your driving time.

 

[5575]

It sure seems like almost everyone on this site has new or at least to me new truck "less than 5 years old" doesn't it.

 

[jpv]

Not this guy. My 2500hd is an '09 and I plan to keep it for a while. It only has 40k miles so might as well just hang onto it. Not saying I wouldn't love to have a new one just no need for a new one right now.

 

[Callem'In]

Either way you look at it, New vehicles are a poor investment. They will always lose money. I look at it like this. Buy a few years old, sell in 5 years and keep mileage under 100K. Lose some money, but have a trade in toward the next one. Lease - pay a lot up front and lower payments, then walk away when done = spend a lot of money, so someone like me can buy it after you paid the major depreciation.

 

[LBrandt]

I am keeping my 05 superduty and my 07 150 until the kids take them away.

 

[pluckem]

What the "better deal" is depends on the individual and how they manage finances.

If you have the mindset, view, or past history that you will always have a car payment (trade in for new one every 2-4 years) then its easy to compare the lease vs buy because its more apples to apples.

If you want to compare what the best deal is on paper, go buy your vehicle, finance it for 0-1.5% and drive it into the ground. That should give you 5 years of payments and then 5-10 years of ownership with no payments.

Personally I seem to like the 10 year plans. Depending on driving habits a 10 year old vehicle still has some life in it and should still be reliable so resale should be decent, especially on a 4x4 crew cab pickup. After 10 years Ill feel like I got my money out of it and made the most out of the bad "investment" of a vehicle.

 

[Bfishn]

What the "better deal" is depends on the individual and how they manage finances.

If you have the mindset, view, or past history that you will always have a car payment (trade in for new one every 2-4 years) then its easy to compare the lease vs buy because its more apples to apples.

If you want to compare what the best deal is on paper, go buy your vehicle, finance it for 0-1.5% and drive it into the ground. That should give you 5 years of payments and then 5-10 years of ownership with no payments.

And in those years of no payments, keep stashing cash so when you do need a new vehicle you can pay cash and really never have another payment. Turn the tables around and pay for the car before you buy it rather than after.

 

[Captain Ahab]

One needs to understand that there's no "getting ahead" when it comes to vehicles (except maybe collector cars if you have the $$, time and know-how). A vehicle is losing value every single day you own/lease it, even if you don't drive it that day.

Need to balance out the utility of what you absolutely need for basic transportation along with the extra you're willing to pay for creature comforts and entertainment/pleasure during your driving time.

Yep. You can actually figure pretty close on how much you "lose" every month of ownership based on the model you drive. I guess that is the whole premise behind a lease. Pay the depreciation.

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Vehicles and cell phones are the two biggest "rackets" out there.

 

[tommygun23]

I'd honestly like to trade down and get rid of a payment all together but we all know that wouldn't work out. If I went with the Ram with a 5.7 hemi to a Chevy with a 5.3, how disappointed would I be? I will also be keeping my 2002 duramax forever.

 

[Retired Educator]

I have done all of the different buying styles, Used, New, and Leased. I would agree that a good used, 1-2 year old vehicle is the best option. The problem is that those are not easy to find. Lots of pickups in the 80-100,000 mile range, not so many with less than 20,000.

I wish I had never heard of leasing. Probably a better deal for someone who can write-off the lease expense with a business. For me the difference between leasing and buying was on a lease you pay nothing down and owe at the end of the lease, or turn back in and you have no vehicle, or pay the difference. Purchasing, you pay more up front and at the end you own a vehicle. In most cases the amount of money you spend will be about the same. Those writing leases know that amount you will pay and it will be about equal.

Purchasing new might not make financial sense but I worked long and hard to be in the position where I can buy a new one every 5 or 6 years, usually trade in the 80-90,000 mile range. When I was younger and a family at home it was always used. Now I like that new-car smell and my kids asking how I paid tor that.

The short answer for me would be Used when you have a family to support, Lease possibly if you can write off the lease as an expense, and New when its feasible so the younger guys with families have something to buy when you trade.

 

[pluckem]

And in those years of no payments, keep stashing cash so when you do need a new vehicle you can pay cash and really never have another payment. Turn the tables around and pay for the car before you buy it rather than after.

Agree for the most part, however recent history with interest rates on new vehicles this hasn't been the best choice. No reason to dump cash on a vehicle you can finance for 0-1.5% for 3-5 years. You could take that cash and pay down higher interest debt or look for an investment that will allow you to beat the low rate on your car loan.

 

[bigv]

I read somewhere from an author that was a financial wizard that...if you want to do well money wise in vehicles- the best thing you can do is buy a vehicle that is in good condition with 80-100k miles. Drive it until it's dead then buy another with same miles. They don't cost much so you pay off quick and they will also last a long time yet so you save money with no payments. Leasing is just renting...what I don't get (since I've never done it) is when you take it back in...you get nothing back right? At least with buying you can sell and get $$ for down payment on another.