Leasing or Owning a Car?

What are the better options? I don't make big trips on the car. I would like the option of having a new car every three years, and I really like the option that the dealer covers maintenance. Has anyone leased a car?


Melissa

[Deebs]

We bought our cars roughly two and three years ago. At the time, I wanted to lease because we always have good intentions of driving our cars into the ground, and then seem to end up looking for something else after a couple of years. At the time, it would have cost us more to lease (which is generally really unusual). We ended up buying and I'm happy that we did, although DH has already started looking for his next car, which has caused a few arguments. With some of the low financing available right now, I'd personally look to buy.

[Chrisada]

Once DH is done with residency we plan to lease cars. We like new cars, so it makes sense for us. My aunt has been leasing forever because she enjoys turning it in after a few years for a brand new car. I personally do not like driving a car until it's wheels fall off like we are doing now.

[scarlett09]

I've done both. My first car was a lease (co-signed with my mom) and I made all the payments. My current vehicle is a purchase, financed through Nissan, no co-signer and helped out by my dad giving a small amount towards the down payment. My payments are a bit higher than the ones I made on my first car, but I own the car and I got a good deal on the financing. It helped that my credit was really good - the salesman was incredulous that my credit score was so high, I guess people in their 20's don't have good credit scores? The car will be paid off the year after we finish residency, so I will keep it another year or two while we get our footing underneath us and then look for a new car. Who knows? Maybe by then I will need a mom-mobile?

I would do your homework about which option is going to give you the better deal over time. Are lower payments more important? Doesn't matter whether you lease or finance, you are going to have a car payment. Dealer covered maintenance? How long do you want to keep the car? Project what is going on in a few years from now. For me, I didn't want to have to worry about turning in a car and getting a new one while I was an unemployed grad student. And when you set foot in a dealership, don't be afraid to hassle and bargain with the salesman. You are coming up on a great time to get a new car. All of the new model year vehicles come out in August and car dealers want to make room on their lots for those nice, new cars. They are often willing to strike good deals on the vehicles from the previous model year. Good luck! Happy car shopping!!

[MrsK]

Buy the car and drive it until the wheels fall off.

[SuzySunshine]

If you can get a good deal on a car buy it, if you are more interested in the free maintenance lease it. But beware of the word free, I have a friend who has two leased vehicles, a Honda minivan and an Infiniti G35. Not everything is included with the Honda but everything is included with the Infiniti, read the fine print.

We own both of our cars, both are paid off and both were financed in 2004 when the financing rates were RIDICULOUS low. We will drive them until we are established in attendinghood and can afford new ones which we will also buy.

I drove by the Honda dealership here the other day and noticed they are doing 0% - that is FREE money, much better then a lease IMO if you can qualify for it.

[poky]

Doesn't matter whether you lease or finance, you are going to have a car payment.

Not true.

Save up. When you pay off your car, put the money you WERE putting toward payments into an account of your own instead. Earn interest on it. When it's enough to buy a car outright, do that. The longer you keep a car, and the more you put away each month, the nicer the car you can buy the next time. Why pay a finance company the interest if you can earn interest on that money instead, for the cost of holding onto a car for a few extra years right at first?

I'm still driving my first car, and I've had it almost 15 years. It's still a nice car, and I take care of it. Having a new car has never been a priority for me, though. If it is for you, you can still do way better than leasing, long-term, by saving up instead. It does take discipline, though.

[scarlett09]

Not true.

Save up. When you pay off your car, put the money you WERE putting toward payments into an account of your own instead. Earn interest on it. When it's enough to buy a car outright, do that. The longer you keep a car, and the more you put away each month, the nicer the car you can buy the next time. Why pay a finance company the interest if you can earn interest on that money instead, for the cost of holding onto a car for a few extra years right at first?

This is a great idea. I always assumed that nobody can really afford to go in and write a check/fork over a bag of money for a new car, therefore there will always be payments. I'm going to store away this little nugget for future reference. It will hang out with all of the other little nuggets I have gleaned from you all - one of the many reasons why I love this site.

[diggitydot]

Edmunds.com is a really good place to research either option. They have info on all current promotions (both for leases and sales) in whatever area you live. They also have articles and reviews about almost any vehicle related topic you can think of. We use that site every time we buy a car.

Thanks everyone! Everyone has offered excellent tips. My main reason for asking is because 1) I am currently driving a 2004 car that I have NEVER ever had a car payment on (one of the joys of an only child) but it has over 100 miles on it. It's starting to def. show wear and tear. If I WAS to buy a car with all the options, I would be getting a five year loan, which would be the same time I would be wanting to get a new car. As some of the other women mentioned, it would be the mom mobile more than likely. Unfortunatly, pricing is def. what I am looking at and most def there is lower pricing with leasing.

But..first and foremost, I want my car to be completly capute before I even think about the next option. I have other bills that need to be paid off first.

You guys are awesome! Thank you for all the really good advice on both sides of the fence.

[Ravenclaw]

Also check out Cars.com; there's a a great calculator for lease vs. buy.

[radwife]

We lease our cars. It came down to security and convenience for us. We like the idea of having something new and reliable when we are thousands of miles away from family. There's no one to rescue us in case something goes wrong. Neither of us know how to fix cars. There's also the comfort of no major unexpected necessary repairs that could cost us big $$ since we have little savings. For DH's Subaru his maintenance is included for free. I have to pay for the Honda maintenance, but it's only been for routine things and I found coupon discounts. Plus I knew when they were coming up and I was prepared for it.

For right now in our lives, living paycheck to paycheck, it's easier for us to pay the known lease payment rather than deal with the unknown. It's probably the same reason why we rent an apartment rather than own a house. It's easier and free to call the apartment maintence guy when the sink breaks rather than find a plumber, coordinate the timing of his visit, and pay the unknown bill.

[SoonerTexan]

I'm not sure what your driving routine is and whether you still drive your car a ton but it's possible you'll go over your mileage for your lease and have to pay per mile. That happened to a friend of mine (errr...her parents) in high school.

DH's 2004 Civic was leased for him by his parents and he went WAYY over mileage. And he destroyed the darn thing, but that is a different story. Anyway, they had the option of paying the extra $$$ for the overage or just buying it, which they ended up doing.

Whatever you do, DONT trade in the Civic to the dealer, sell it on your own. Civics keep their value ridiculously well (Believe me, I know, I wanted one and was POed and how much they were going for used) and you will get WAY more for it selling it on your own instead of taking the trade-in value. I cant remember the details, but I want to say DH's Civic was worth about 4k more (even with the wear/tear and high mileage) on the used car market than what the dealer was willing to give on a trade in.

[Thirteen]

I own my Civic ('07) and already have 85k on it. But we're holding onto it and will sell post-residency and put the $$ down onto our "family car."
They do hold their value ridiculously well, and that's why I went for one and purchased it outright.
I love my car.

[SuzySunshine]

This thread makes me miss my Civic - great car!