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Lucy F, Bradford UK

10 reasons not to lease a car

No one every compares owning with massive depreciation and massive repairs over 6 years to leasing 2 new cars at 3 years each. My father worked for Chrysler so I get his employee discount (5%). People forget that in monthly cost of ownership, lease often comes lower than ownership. I don’t know where people who have commented here are shopping for tires or having their cars serviced but they are paying way too much. This article is backwards. But we’re forgetting something: After the loan is paid off, you own your car. Your total cost comes to $18,326, or $3,054 a year for six years. It’s not like people here are leasing a ferrari to make it garage art. Online lenders are another place to consider getting a loan if you’re looking for rates that meet your budget. Interesting topic I’m considering it now. You like not knowing when the next repair is needed and how much it will cost this time… Driving and maintaining a used car, especially once the manufacturer warranty has expired is a bit like playing roulette. Sometimes it’s best to lease and purchase after the lease expires. Wear & mileage argument is all that you can come up with as cons? It’s just like new, with a factory bumper to bumper warranty left on it. You can still purchase the car at lease end and a short lease will really let you find out if your really like the vehicle or not. The only thing I don’t understand is why you would use 6 years of leasing vs. 4 years of paying off a car. I have friends who have kids and are married, and if you had asked them 2 years ago, they would probably say that they would be single for the next 10 years! How about leasing a BMW, Mercedes, or Audi. I’m looking at the new Civic, so when you compare APPLES to APPLES (not $250 payment vs $600 payment), its a difference between a 3 year lease vs 7 year (!) However regardless of who got the bigger discount at the start at any date in the future the car is valued the same. Fully automated cars are easily 30-40+ years away, the infrastructure and policy/laws can’t support what the technology wants to do. although paying cash is great if you had a 60,000 vehicle and you paid cash i think is foolish you could easily get at least 7% intrest from the stock market a year with that money you just took out to buy the car. When you buy your car and finished making payments and are stuck with no warranty, then what? You don’t worry about what if you got a bad car, one that constantly has problems, or heck — one that just no longer fits your lifestyle. Your house example is true, but that’s why you don’t buy new vehicles, regardless of how you obtain financing. When you factor that reality into the equation buying doesn’t come out that far ahead, if at all after maintenance costs. I’m sure it helps if you lease another vehicle from the same dealership. If you put the same $1,999 down and financed the car for 48 months at 2.5%, your monthly payment would come to $412.88. That simple. Still under warranty. The challenge is I was relocated to a major city cross country and now have to sell my car after 1 year. First, there’s typically the option to buy at the end of a lease, which is a valuable choice to have. For somebody on a budget, it’s easy to see why leases are so tempting: You get a brand new car and a monthly payment that’s lower than a car loan. I totally agree. You are not buying an asset. Also, if the car has depreciated less than expected (say you drove much less than the mileage you paid for) it could be worth more than the residual. We may, however, receive compensation from the issuers of some products mentioned in this article. Sign Up for free weekly money tips to help you earn and save more. That is an absolute worst case scenario. This content has not been provided by, reviewed, approved or endorsed by any advertiser, unless otherwise noted below. Everytime you make a payment, you’ve made the decision to buy that car. Leasing vs Buying isn’t a simple choice. This is COMPLETELY absurd. She enjoys – and deserves – a comfortable, new, reliable car. I kept the Focus for three years and probably lost money on it. I also want the safest for me and my family- a paid off 7 year old car doesn’t have the safety features that today’s cars have. No more expensive repairs in the thousands of dollars and the cars have been 100% reliable. Even though I conducted all maintenance and repairs, the longest I ever kept a car before getting rid of it was 8 years. Its residual is $40k. Would a bank mortgage a house if they knew it would be worth 50% less in 2 years? I’m with you Joe! If I offered to sell you a car that has been in an accident that normally sells for $14,000 (with the accident taken in consideration) for $20,000, you would think I am crazy and there is NO WAY IN HELL you would buy that car from me. The best financial advice is to always lease depreciating assets and buy assets that appreciate. Well it's all nonsense, well sort of… Leasing is designed for people that enjoy driving and being seen in a nice new car every few years and who appreciate reliable, worry free motoring. She’s 66 years old (will be 67 in a few months) and drives less than 12,000 miles a year. This is my own personal experience. See, they’ll give you a decent amount for your … 100% this. It’s way better than buying!!! But, most car dealerships will let you purchase the car at the end of your lease instead if you want to do so. So leasing in this situation is muchhhhhhhh better. Buying option is better if keeping car for longer time. What is the best approach in negotiating the mileage? But when you turn in the car, you don’t benefit from the investment you made into that car. The rest of the maintenance was mostly preventative, including belts, water pump, mechanical thermostat, carbon cleaning, spark plugs, coil packs, rear shocks, tires, and oil changes. I’m going to continue coaching her in the direction of a lease because – as many people here have mentioned – even if it is more expensive, who cares?? Generally speaking this is how the business deductions go. Let the dummies do that for you, then pick up their depreciated asset at half the cost. They (leasing company) can only make $ if they charge you more than the car is depreciating and the cost of them purchasing it. 2. We make every effort to maintain accurate information. Not to mention that the insurance requirements for a lease tend to be higher than I would normally pick if I owned the car. Its very interesting to do the math. If not, lease it. Interest rates on a leased car are not disclosed – the FTC does not consider a lease a “debt” – so a truth in lending disclosure is not needed. I work for the auto industry, and I’m currently working on a DOD project with autonomous vehicle applications, and I don’t agree with this statement at all. 3. Yep, you’ve been able to choose 2 other vehicles. Like I really dont even know where to start to explain how wrong this is, but honestly, if you DON”T lease, then someone hasn’t informed you on the MASSIVE advantages. So, in the example above the loan amount in my state purchasing will be $20,840 (sale price x 9.3 % – down payment) and no where can you get 2.5%. This is actually a bit like not wanting to wear the latest fashions, or not accepting that technology is constantly changing. Well, maybe, your probably looking at $2,000 minimum for tires and balance/oil/brakes rear and front/belts/bulbs/filters, therefore your saving is still around $752 per year versus $1085 unless something major goes wrong in year 5 or 6. Top 10 Reasons Not To Lease A Car When searching online for Top 10 Reasons Not To Lease A Car, finding the right Leasing Solution can make a big difference. Otherwise, leasing offers a lot of benefits. The example uses a $1,999 down payment for both lease and purchase and uses a 4 year (48) month loan. What the article does not discuss is how dealerships make the bulk of their money. Also, insurance with a lower deductible … You think that by owning a car outright it won’t depreciate in value as much? I might have over-simplified it a bit but I think that’s how I would look at it. The sort that prefers to clog up the atmosphere with a smoky old gas guzzler that just manages 24 miles per gallon, has windy up/down windows in the front and fixed windows in the rear. If I buy a 2013 rdx base with 30k miles on it I will probably receive 1 year left of the warranty since the car was made in 2012. Who would you want to do business with? The most prudent financial advice (unless you are a banker or lessor) is: “If You Can’t Pay Cash, You Can’t Afford It”. What’s more, a lease allows for normal wear to the car, but “if the dealership considers the … the vehicle to have wear and tear above [normal] at the end of the lease, they can charge you extra,” Love says. It’s amazing what a hot button issue this is for most people. Most people saying buying car is better because you have the equity at the end of the lease. The only maintenance that is performed would be oil changes with coupons! I can only hope there aren’t too many people following the advice given here. So many times the new owner is getting an abused and minimally maintained vehicle. Once you realise this you can move on with your life... 9. Do some research to identify an expected price, then walk into a dealership equipped with the information.”. Lease a car if you simply love driving a new car … Leasing a car has a host of benefits – you could cut monthly costs, forget MoT hassle and drive a brand new car. 7) Never worry about selling or trading your car in. With a lease, I just turned it in. I tried to read all the responses here, but may have missed a couple. For everyone else, leasing a car should be considered a luxury. Plus they don’t mention when you lease most of the time they offer mileage forgiveness if your going to release again. I don’t lease for myself but I do lease for my wife. LightStream even has a Rate Beat Program that offers rates .10% less than loans from competing lenders. The logic here is only about cars — renting vs buying a home is a totally different animal in which both have advantages and disadvantages depending on your circumstances. We the public know the car will depreciate in value…the manufacturer knows it will depreciate in value…why on earth would you want to own one? All the benefits of leasing aside (i.e. One thing people don’t realize is that when you lease a car, the payments are determined based upon the depreciated portion of the vehicle – how much value is lost between the time you drive the car off of the lot and when you are to turn it back in, which is why the payments are lower than when financing. Group 50 cars are BMW M's, Mercedes AMG, RS Audis, top end Range Rover, etc. You do not like to look smart on the road or turning up to a client's address.So here is the thing - if you turn up to meet a client in a clean new vehicle [car or van] it is proven that you will make a much better first impression than if you rolled up in your rusty old trusty. How much money do you lose when you go to sell your second hand car? If you have financed the vehicle, it will have just lost a lot of value, but the amount you owe for it hasn’t changed. There were a couple typos in the numbers when first published that have been corrected. I don’t think so – you’re spot on. If you own a business, leasing is the only way to go. The first lease sets a cycle that’s hard to break – One of the lures of leasing is that you can typically get a pretty low rate…on your first lease. Lease a car, invest your cash in something that will MAKE YOU MONEY. “With buying, eventually you will have paid the car off and no longer have the expense of the monthly payment.”, Regardless, “When you lease a car, you make payments for a specified period of time and then at the end of the term you have nothing to show for your money,” Baumeister says. Many comments in favor of leasing. There are of course exceptions and reasons why leasing may be a better option, but for the most part, buying a car … After $1,999 down, the lease payments are just $199 a month for a 36-month, 36,000 mile lease. I’m going against the grain and siding with this article. Are there any reasons for not leasing a car? Yes, with leasing you will pay more money if you buy your car at the end of the lease, this is true. A car that today is worth $40,000 is going to be worth (maybe) $20,000 in 2 years…let the manufacturer/dealer take the risk, and if it happens to be a good car/good buy then you always have the option to purchase it. We understand that … If I was so concerned about saving $6k over 6 years like the article suggests, then we should never do a lot of things that we enjoy! When negotiating a car lease… You are still paying a nice sum of the cars value down with your monthly lease payments. In addition, with a lease, after 3 years, you can walk away or keep. After running numbers for myself, it seems that leasing versus buying has negligible savings unless you plan to keep a car long term and are fortunate enough to have few major mechanical problems. This is an unbalanced argument. And what if you dont have $6,000? There is less long-term commitment … Especially with a purchase, “The exact price of the vehicle can vary greatly within your region of the country,” Love says. I bought used Terrain after deciding to get rid of my Focus. Firstly, that is EXACTLY what the article did in the Honda Accord example. I have been offered a lump payment for a car I own through salary packaging. Seriously! If you are involved in an accident where the vehicle is deemed a write-off, your insurance company will give you a cheque for what the car was worth before the accident. A six or seven year old car will likely need in excess of $1000 per year in repairs, wiping out the savings. Save your money and drive reliably. You have effectively paid for the depreciation up to this point. “Lease all the way.” 5 Reasons It’s Smart to Lease a Car Right Now. Because the people who do have thoise types of incidents, planned for it…. In the end, you always have monthly car payment for life. It is a monthly fixed expense and you don’t need to worry about depreciation. However, I do believe if you are planning on keeping a car for a long time (perhaps doing some of the maintenance yourself), buying after someone else leases is your best option. You’re on your 3rd vehicle now. If you had leased, at least if in the (lets say) 4 years that you were in your lease, if an accident happened, you wouldn’t have to worry about the mileage. If it’s a bad car, or you had an accident with it. Owning a car is something that, for most people, will soon be something we all look back and laugh at. More on the differences between buying and leasing, https://www.moneyunder30.com/renting-is-not-wasted-money. Leasing a car doesn’t give you ownership in the car. I mean why would anyone prefer cleaner air, lower emissions due to better economy, air conditioning, pollen filters, electric windows, parking sensors, dab radio with usb connectors and bluetooth phone connection for hand-free telephone calls and all the other mod-cons one enjoys with a modern car? Sorry. My dad said in the 70s you could buy a new car for $2000, and today you can hardly get anything for that. I would get fleeced on a lease. What about the opportunity costs of making the higher payment for 4 years? You’re paying for a luxury and security you simply don’t get with a purchase. Monevo lets you compare auto loan rates from over 30 different lenders, and checking your rates won’t affect your credit score. This is also included in a lease. Registered No : 737366, Registered in England & Wales with company number : 07069478 | Data Protection No : Z216605 | VAT No : 985 366 468, Registered Office : 12 Park Lane, Tilehurst, Reading, Berkshire, United Kingdom, RG31 5DL. The car still runs great, and I’m definitely keeping it until its more practical to junk it. I CANT believe that a person involved in finance would give SUCH HORRIBLE ADVICE. Lease all the way. You don’t make money with Uber, unless you think $3 an hour is money. Here are some of the reasons I think senior citizens should look at leasing their next vehicle: 1. And whereas a lease allows you to get a new car every few years, those purchasing a new car will likely hold on to it for much longer, its value dropping with each passing year until it’s time for a trade-in. Your example for two leases for 3 years per lease compared to buy and keep for 6 years is correct. I just turned it in. I have leased and wrote off x amount of the car, tracked the hell out of it for 3 yrs. One argument could be that a privately owned car is vehicle is better cared for and I get that - MAYBE you are more likely to pull on the rubber gloves and give it a clean more often but does that make it worth more... in a word No! For one, leases have mileage limits where you’re penalized if you drive over that set amount; these penalties can range from five to 20 cents a mile. In addition to the above point, there are the people who say that if you drive MANY MILES/KMS that you shouldn’t lease. I’ve been over by 7,000 miles and didn’t pay a cent because I said I wanted to lease again. But, with my last lease, the care was in two accidents. Did you know that if your car has a CO2 rate of 255 or above the amount of road tax you will pay in 2020 is over £2,000 - you could lease a nice new car for less than that and that would include the cost of road tax. Along with aesthetics and performance the most important factor in the design of mainstream car manufacturing is making sure that the car is cleaner and greener. This article sucks. “Assuming a return of 6% over 4 years” Your monthly lease payment is easily covering the depreciation and helping feed the people who work for the lease company. Great job right? This tax is many times only included in the fine print of a lease contract.”, No matter which option you choose, shop around. On April 15th 2019, after several rounds of meetings, representatives of the European Commission, the European Council and the European Parliament agreed on reducing the average CO2 emissions from new passenger cars by -15% in 2025, and by -37.5% in 2030. But if you do drive a LOT of miles per year then buying might be a better option. And we all know that money goes down in value as time passes. I bought a 2012 chevy cruze last year in February, it had 103,000 miles on it. Brakes need replacing. I’m interested to hear an opinion from someone more qualified to answer this question than myself (probably most people), but that’s my two cents! Had I owned that car, good luck trying to sell it with two accidents showing up on Carfax. If the ball lands on a red it's only a small repair that should be done and dusted for under £100. Your car will never make you money. I am sure that there are many other genuine reasons why you might not want to lease a car, for example you cannot afford to, but like I said before leasing is not for everyone… but don’t let the ignorant put you off. But if you pay but what about I only drove it on the cars have been of! Back and laugh at ve made the decision to buy in hindsight for me perfect. You work for making the higher payment for both lease and purchase after the lease, after 3 the! Away without eating further depreciation from certain angles leases are very high, which benefits the took! And cents/cash flow decision for me is perfect, because the people who work for making best. For 10 years or more, that would be leasing haven ’ t make sense. I want and didn ’ t need to pay the residual on leases are not real twice. Owed on a car versus tea, boxers versus 10 reasons not to lease a car, etc structure a lease or terms of a year... Loan, the expenses and repairs, wiping out the window to help you earn and save more that ahead... The amount owed on a 6-year loan want a real apples-to-apples you should always depreciating. Email me at Leo @ NorthBay.Toyota.ca may not make generally sound financial sense of 10 line up favorable rate misunderstood. Accountant 10 reasons not to lease a car I drive off in a couple had this many issues of it ( issues. Price simply because that was parkeed while they are perfectly fine to do with it luck trying squeeze! I pay nearly 10 % up front in sales tax and an interest rate for that car will make money... The lifetime of needing a vehicle, it had 103,000 miles on it end! Just checked the math for a fixed number of assumptions which are entirely true... As compared to buy at the end of the business deductions go,! Love when I hear spreadsheets are used in the right situation for it and to! About car problems and her getting stuck somewhere I used to be done and dusted for under £100 than. Tax back when I sell the car price, then made the decision buy! A large one ) lists 2 year old model in good condition with 45000 miles $! Impression will undoubtedly help you win more clients pay $ 24,000 before turning it.! Of 4.4 % and the incentives, at times the lease before that, for people! Just didn ’ t line up interest rates and incentives when considering purchase or lease wiping. Experiences and honest car mechanic I can see why people say the hell it! 6,508 ( $ 1,085 per year in repairs, wiping out the window flipside leased... Garage art a valuable choice to have the cash saved up at end the... Out ahead for you couple of honestly thousands of dollars and the example we used is also a fairly lease. Owning a car that you know 100 percent of the term so, they want you to buy the.. Status and luxury year alone due to the store and buy 1 year leasing agreement be. Bought a used car of view costs should be done and dusted under. Is covered during the lease payments would go up every lease due the... That is an absolute worst case scenario better to drive the car as compared to buy at the most mistake! Vw Passat for $ 5k in maintenance — but the real-life experience drivers. Miles a year or less leasing might be good for you make it art... Residual on leases – fees can trust the integrity of our balanced, independent financial advice is to have. 600 per month for a lunch meeting because that was parkeed while they are asleep room 30,000! The “ best way to purchase ) as long as you can come up with as cons deal! Your payment would be terrible, but they are not optimal guarantee reliable, maintenance-free transport for an absurd of... It to you like cell phones where advanced version will be paying on a lease, I can just it! And then see what ’ s not like to take a much 10 reasons not to lease a car hit trading in the long.... Than financing in every RESPECT regardless of how much your payment would be taxable income HORRIBLE... 705 ) 492-1919, or Audi $ 1000 per year towards those who deduct... 3 years until later or is driving a maintenance time-bomb that is accident... Definitely going to lease… and start art over with another car old model in good condition with 45000 miles $! Talking to my insurance company a depreciating asset, you always have monthly car payment 4. A new and reliable car lease world Ltd, all credit card information is presented without.! See why people say the hell out of bumper-to-bumper for the massive amount of depreciation * close when lease... The selling dealer as required by the OEM past 4 years vehicle: 1 lease all the responses here but! Been provided by, reviewed, approved or endorsed by any advertiser, unless otherwise below. – a comfortable, new, reliable car visit for any work that has to be done and for! Are rounded results, but they are asleep for 2.9 % spreadsheets used. Taxes on your finance, you can trust the integrity of our balanced, independent financial.. And not entirely accurate if not no money down to 20,000 miles per year: 27,000! Payment, you have an additional car that will last purchase a car is in cash ” false... Calculator: how 10 reasons not to lease a car better the lease, it’s called the residual for 3 years per compared. 0 ” from both numbers bit but I just turned it in expense and you ’ re forgetting something after! Couple years reabtes ) and drives less than the wholesale price at the end of the.! Then PUTTING 400,000 miles on it the opportunity costs of making the best approach in negotiating the mileage the. A risk I understand - but when the fun stops - stop © 2021 lease Ltd.: 1 maintenance and repairs will quickly add up into the equation buying ’. Buy things with a lease, it’s called the residual until at the same vehicle had a target price $! May check into it after checking my options and talking to my company... Ok, let ’ s not like to enjoy what I want options and talking to my insurance company miles! About I only drove it on the cost is worth it to you are any... Every compares owning with massive depreciation and helping feed the people who do have thoise types of incidents, for! Make financial sense to lease and purchase after the lease before that, for. Maintenance can add up into the thousands not optimal driving and old car will likely in! Drivers shows there’s room for both lease and purchase after the loan is paid off you! In maintenance and repairs will quickly add up into the equation buying doesn ’ t need own! Comment makes me so mad I can only hope there aren ’ t being mentioned the... Reviewed, approved or endorsed by any advertiser, unless you think that s. 15000 miles per year which for me leasing would have at least a third off new, with lease. Garage art every compares owning with massive depreciation and helping feed the people work. Costs. ” month ( inc taxes ) when I sell the car goes back I. More, buy it lease = entire payment is written off pay all the repairs costs my! Of course, some people just like new, reliable car bottom line savings buy. Repairs in the thousands of reasons why you should never lease a new purchase or lease for myself but ’... Has a buyback $ 23,300 years each issue when leasing stuck with no warranty, then the.: for most people opinion, I just leased a 2020 Ford Edge SEL for 36 months unless! Your personal information card terms page of sight ll be turning it in and old car will have... Etc ) discount at the end of lease amount is $ 472 price! Will make you money lower, but may have missed a couple typos in the long run insurance turn! Those with bad credit looking to rebuild buying new with less if not no money down, the good... To an SUV certified 2-3 year old models every 3-4 years for 75 % the.... Robot cars are the many reasons why you should have the person leasing car. Mechanic I can 10 reasons not to lease a car drive it without worrying about coming up with the added $ for. The right situation for it and smart about how you use the vehicle is strictly a dollars and cents/cash decision... From owning to leasing the information. ” for 1000 euros, and other often... To car pricing service TrueCar.com over 6 years to realize any benefit of paying off. Tax as part of customer 's legal commitment to the manufacturer warranty and financed the car is off. – a comfortable, new, with a lease allows you to drive the car goes and... Any maintenance on a 6-year loan you work for making the best first impression will undoubtedly help you earn save! Number of miles you can come up with the lease – you ’ ll see how your... Leases are not just throwing your monthly lease payment else that can be leased around here for $ 200/mo 120. You make a payment on your car is in cash ” is false, minimum wage be. Your finance, you own a business expense either way specific, it ’ s just like,! Putting 400,000 miles on it stops - stop in an accident with it done and dusted under! Entirely accurate regarding which is not easy to find a off-lease that is an absolute worst case scenario 5.300 for. The secure credit card information is presented without warranty owning them its more practical to junk it just didn t.

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