topic Lease or Buy? Why or Why Not? in Community Chat

Lease or Buy? Why or Why Not?

Lotus — Sat, 12 Dec 2015 22:37:07 GMT

I'm thinking of purchasing a new SUV. I haven't bought a new vehicle since 2006 and I don't even know where to start.

I know what I want and I went to a dealer today and listened to an hour and a half of BS. JUST CUT TO THE CHASE AND GIVE ME THE BEST DEAL YOU CAN!!!

Well......it appears that unless you are a rocket scientist, it's hard to read between the lines and know what the best deal really is. It's as bad as buying a mattress and trying to price compare.

Things have really changed since I bought my Explorer.

Any advice?

Would you buy or lease? And why?

TIA

Re: Lease or Buy? Why or Why Not?

JustJazzmom — Sat, 12 Dec 2015 22:39:59 GMT

Lease if you plan on not keeping the car more than 4 years.

Try to get 0% financing if you are buying a car.

Re: Lease or Buy? Why or Why Not?

MyGirlsMom — Sat, 12 Dec 2015 22:42:51 GMT

Hi Lotus,

Since you know what you want, no need to suggest going to Consumer Reports.

A lot depends on how you use your vehicle. If you lease, you're 'boxed in' with a lot of parameters. If you can abide by their rules, by all means lease.

Personally, i would buy because I can't abide by a lot of things the lease requires.

Re: Lease or Buy? Why or Why Not?

Bird mama — Sat, 12 Dec 2015 22:46:40 GMT

I leased cars from 1996 through 2008.

Because I stayed with Nissans after the first time - I only put down a downpayment of like $300 which I got back the first time.

I never paid another down payment after the first time and never had excess wear and tear on my car.

Pros:

If a big downpayment is not required, leasing gets you in a car you may not otherwise be able to afford

As a woman, it ensures you are driving something new usually 2-3 years

The car is usually covered under warranty the entire time

Cons:

Because you are always in a newer car, insurance can remain high

Constant car payment

Depending on how much you drive, mileage caps and risks of paying for mileage above the allowance

I bought my current car in 2010 and paid it off in 3 years - got no interest that way. Then again, I had a hefty downpayment so monthly payments were manageable.

I loved having no car payments after three years.

Re: Lease or Buy? Why or Why Not?

Desertdi — Sat, 12 Dec 2015 22:48:46 GMT

I put money away in a "car fund" just as if I was making a payment. When I have enough CASH......I buy a car.

Re: Lease or Buy? Why or Why Not?

Mominohio — Sat, 12 Dec 2015 22:51:47 GMT

The most important things I can thing to offer up here are

Leases have mileage limits, and many people can't stay within those and use the car the way they want/need to.

At the end of a lease, you can buy the car (not really the best deal, but I did it once in a pinch) or turn it back in, so you get to test run it, or if it turns out to not be what you want, you aren't stuck with it forever.

With a lease, you do have to be very careful about the way you take care of the car, it has to go back in good condition. If you are hard on a car, or don't take care of them well (and there are many out there that don't, just a fact, no judgement), then a lease might end up costing you big at turn in time.

If you lease, you will turn in the car before major repairs start up and get a new one. I always thought leasing was good for folks that don't know how to work on a car, or aren't interested in making 6 years of payments, and repairs that will start to be needed near the end of that loan time. Repairs can be very costly, and it can save stress and money to just trade a leased car in every few years.

If you buy you will be able to take the cost of that car and average it out over many years, if you tend to keep a car a long time. We always keep a new car for at least a decade, so leasing is really never for us at this stage of life. My husband is a mechanic, so we always buy, as he can fix them much cheaper than a dealership or other garage.

Re: Lease or Buy? Why or Why Not?

DiAnne — Sat, 12 Dec 2015 22:54:39 GMT

Whenever I buy a car I always feel like I am somehow being cheated. The last car I bought was through Costco's car buying service.

Re: Lease or Buy? Why or Why Not?

Deb1010again — Sat, 12 Dec 2015 22:57:51 GMT

Check out an online site called "True Car" (truecar.com) it'll show what people are paying for the exact same car in your area. We used it once we figured out what car we wanted and made the dealer give us a specific price and showed a print out from True Car. Be firm with the dealer and they'll match the deal.

I'd never lease because it ends up being too expensive and they make money on mileage overage and any little ding on the car at the end of the lease.

Re: Lease or Buy? Why or Why Not?

tansy — Sat, 12 Dec 2015 23:00:14 GMT

@Deb1010again wrote:
Check out an online site called "True Car" (truecar.com) it'll show what people are paying for the exact same car in your area. We used it once we figured out what car we wanted and made the dealer give us a specific price and showed a print out from True Car. Be firm with the dealer and they'll match the deal.

I'd never lease because it ends up being too expensive and they make money on mileage overage and any little ding on the car at the end of the lease.

I was going to suggest that site, too, as well as Edmunds and Kelly Blue Book.

Re: Lease or Buy? Why or Why Not?

Deb1010again — Sat, 12 Dec 2015 23:07:22 GMT

@tansy wrote:
@Deb1010again wrote:
Check out an online site called "True Car" (truecar.com) it'll show what people are paying for the exact same car in your area. We used it once we figured out what car we wanted and made the dealer give us a specific price and showed a print out from True Car. Be firm with the dealer and they'll match the deal.

I'd never lease because it ends up being too expensive and they make money on mileage overage and any little ding on the car at the end of the lease.
I was going to suggest that site, too, as well as Edmunds and Kelly Blue Book.

GREAT Good to know others agree. Lotus didn't ask about price, but TrueCar really helped us figure out what was a good deal for the particular car in our area and charted out what other people paid. You can't argue with that when you share it with the dealer. It really levels the playing field.

If the dealer won't honor the Truecar price I'd just call another nearby dealer or those Truecar suggests. The way I negotiated our car (Honda Odyssey) was to call the closest dealer, mention I was using Truecar and stating the price I would pay and what features it included. They ended up not having one in stock but found one in a town a few hours away and had it brought to the dealership the next day. DH went, test drove it and bought it on the spot for the Truecar price. So easy.

Re: Lease or Buy? Why or Why Not?

gidgetgh — Sat, 12 Dec 2015 23:25:59 GMT

I would never lease. For me, it's like renting a car for years on end. And in the end, you have nothing to show for the payments. Might as well just go to Hertz. And then there are all those lease issues regarding mileage and stuff.

Re: Lease or Buy? Why or Why Not?

Cats3000 — Sat, 12 Dec 2015 23:35:41 GMT

Go to the Kelly Blue Book website and search on the car that you want, equipped the way you want it. It will show you the Manufacturer's Suggested Retail Price(MSRP) for the car, the price the dealer pays for the car, and a range between the two that Kelly Blue Book considers to be a "Fair Price" to pay for the vehicle. Remember that the dealer pays LESS to the manufacturer of the car, and that for the MSRP, the key word is "SUGGESTED". The dealer can charge whatever he wants to. You can always vote with your feet if you don't like the price.

As for leasing, remember the "low lease price" they quote you is often for a small number of miles per year. If you exceed that, you'll pay through the nose for the extra mileage. The higher mileage leases will cost more. We always buy our cars. We buy what we can afford and either pay cash or take an auto loan. We would never consider leasing a car.

Re: Lease or Buy? Why or Why Not?

millieshops — Sat, 12 Dec 2015 23:37:09 GMT

Good discussion and timely for me.

I had my 2008 car in the shop yesterday for minor stuff - oil change, tire rotation, and pictures so I can get Toyota to replace my dashboard.

Usually, I take the dealer's ******tle home for a few hours, but yesterday I decided to stay to speak with a rep about leasing or buying a different car. As Lotus said, what an experience! I came home with more new knowledge than I know what to do with, and, for sure, learned that those who complain about the QVC hosts pressuring them to buy have no inkling what pressure is.

I do know what I want should I trade cars, but I also need to finish deciding just which extras I really want/need and the decision about buying or leasing turns out not to be nearly as easy as it once was. That's also something I have to work on --and what we knew a few years back doesn't seem to apply today.

Thank heavens I don't have to get a new car becausee I really need time to work on the whole process, so I walked away with my info and a small bill for the work finished by the service department while I shopped.

Re: Lease or Buy? Why or Why Not?

esmeraldagooch — Sat, 12 Dec 2015 23:40:12 GMT

This is what Dave Ramsey says about them.
ANSWER: A car fleece is basically renting a car. You pay $400 a month and at the end of the new car lease, you turn it back in. If you want to buy it, you are buying it for what they estimate at the beginning of the fleece to be the market value. At the end of the lease, it’s called the residual value. If you pay $400 a month for 60 months, you pay $24,000 before turning it in. The car will not have gone down in value more than that, because the car companies would lose money if it did. When they get the car back, you will have paid them more than the car has depreciated during that time.

During that time, you’re maintaining the car as if you owned it. You’ll get charged for excessive wear and tear, or if you put too many miles on it. If you rent it for $24,000 and it went down $15,000 in value, then it cost me $9,000 to rent this car for this period of time. That is their profit during that time.

Another thing is that the interest rates on a vehicle lease are not disclosed because the Federal Trade Commission has determined that this is not a debt, so there is no federal disclosure involved. Therefore, you have no truth in lending disclosure sheet. The interest rates you get charged are unbelievably high. That’s where you’ll realize you got screwed over.

People get sold automobile leases because they are told that it’s what sophisticated people do. But as it turns out, the car companies make more money on leasing you the car than if you bought the car with cash, according to the National Auto Dealers Association. Broke people think ‘how much down and how much a month’. Rich people think ‘how much’. If you can’t pay cash for a car, then ride a bicycle. But don’t lease a car.

Re: Lease or Buy? Why or Why Not?

kivah — Sat, 12 Dec 2015 23:46:26 GMT

I also suggest u go thru Costco. I believe AAA also has this service - as well as other companies. You're buying at Fleet Price - no salesman. Just go to costco.com and search Auto Buying Program. I think u fill out a form about what ur interested in buying - then salespeople call u. There's still room to negotiate when ur at the dealership.

My 29 yr old Honda Accord finally broke down 2 weeks ago. I know a salesman who works for Lexus (Lexus owns Honda and Acura dealerships). So I called him and told him that I wanted another Honda with the fewest electronics (I'm older and get confused easily). He went to the Honda dealer 2 blocks from Lexus and found a 2012 pre-owned Honda Civic with 34,500 miles -- the car was a lease - and in perfect condition.

I've never leased a car - but most of the time, it's best to buy.

Re: Lease or Buy? Why or Why Not?

queendiva — Sun, 13 Dec 2015 00:33:48 GMT

Lotus- I feel your pain with car shopping.

I am finalizing a purchase on Monday. Based on my experience, I would suggest the following:

Buy. Pay cash or finance for the least amount and time possible.

Check out Costco as others here have suggested.

I prefer Car Gurus over True Car. Very comprehensive and user friendly. I have looked for a car for over a year on this site because I buy late model used cars. What I am buying is a 2014 luxury vehicle with almost all the available options. I let someone else take the nearly $20,000.00 depreciation in exchange for a few miles on the odometer.

I know what I am willing to pay going in to the process. I could never enjoy a car that I paid too much for. Check on line and buy from a reputable dealer. It may not be the one located closest to you. You can always go to the local dealer for service, regardless of where you bought the car.

I walked out on the deal when I saw all the fees. Kept an eye on the car for a few weeks, called back several days ago and suddenly they met my price. Taking the car to my mechanic before signing the papers even though it is still under warranty and has a clean Carfax. The car I am replacing is 10 years old and still runs well, but this is the time and deal for me. lus, I thought a red car would look good under the Christmas tree, LOL.

Good Luck!

Word has it that Christmas Eve day is a good day to buy a car. Dealerships are quiet and "in the spirit" to do a deal.

Re: Lease or Buy? Why or Why Not?

GCR18 — Sun, 13 Dec 2015 00:45:44 GMT

I have never leased a car. I didn't like the fact that you get nothing at the end of the lease. I know you lose money driving out the lot, but at least the car would be mine in three or four years.

Re: Lease or Buy? Why or Why Not?

Irshgrl31201 — Sun, 13 Dec 2015 00:55:04 GMT

I am of no help here. I have never had a car payment and up until recently always bought used cars. I spent a couple thousand cash on what I could afford at the time and it wasn't until about 10 yrs ago that I got a new car (well 2 months old so I could save a couple thousand dollars) and I used cash for that too. I really didn't want a car payment. It wasn't until 2007 that I got a brand, brand new car and I still wish I would have gotten one a couple of months old just so someone else could drive it off the lot and pay thousands more.

Car payments bug me and I also don't want to give someone that much interest either.

Re: Lease or Buy? Why or Why Not?

Lotus — Sun, 13 Dec 2015 01:20:56 GMT

Thanks everyone.....I'm leaning more towards buying.....the salesman put the pressure on me to lease. My first thought was that was because it would be worth more to the dealership in the long run.

I hate the thought of payments every month and then having nothing at the end......HIS suggestion was to turn it in and get a new one. SUUUUURE....of course.....even more revenue for the dealership and more monthly payments for me.

You guys confirmed what I was already thinking.

Re: Lease or Buy? Why or Why Not?

queendiva — Sun, 13 Dec 2015 01:20:34 GMT

Lotus- remember that a selesperson can only tell you what the best deal is-for them. You must spend the time on line researching the best deal for the make/model/ options you want.

if you are looking to purchase a new car, consider the remaining inventory of 2015 models. They will be marked down now. DS bought a brand new 2013 model in January, 2014 and got a great deal. He and I had been researching prices for several months and knew a really good deal when we saw it.