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Purchasing vs Leasing new car
Posted on 3/24/23 at 9:28 am
Posted on 3/24/23 at 9:28 am
Have always bought new, drove til they were near end of life, invested monthly car note during period of time of ownership when no note (7-8 years of the car’s life), trade in, repeat.
In doing so, accumulated cash available to buy next car. Gives option of paying cash or financing if offer enables leaving money ‘invested’ at higher rate of return than financing costs, ie, work positive return/cost spread. Many years…much cash.
It’s time for new vehicle.
Have cash.
Supply issues have driven prices high.
Inflation has driven financing costs high.
We are looking at luxury sport sedan with high insurance and high maintenance costs after warranty.
Keep one car on our traditional own to end of life way. Lease fun cars and cycle new fun cars at faster cycle.
Lease payment from annual budget. Keep cash ‘invested’.
Thinking (very early thinking) about leasing.
Pros and cons in general and in this context, might this make sense?
Thought would lean on MT experience and insights, pls. Again, early thinking days in this so is appreciated.
In doing so, accumulated cash available to buy next car. Gives option of paying cash or financing if offer enables leaving money ‘invested’ at higher rate of return than financing costs, ie, work positive return/cost spread. Many years…much cash.
It’s time for new vehicle.
Have cash.
Supply issues have driven prices high.
Inflation has driven financing costs high.
We are looking at luxury sport sedan with high insurance and high maintenance costs after warranty.
Keep one car on our traditional own to end of life way. Lease fun cars and cycle new fun cars at faster cycle.
Lease payment from annual budget. Keep cash ‘invested’.
Thinking (very early thinking) about leasing.
Pros and cons in general and in this context, might this make sense?
Thought would lean on MT experience and insights, pls. Again, early thinking days in this so is appreciated.
7
Posted on 3/24/23 at 9:33 am to Turf Taint
I am in the same boat. Just remember you can't "modify" the lease vehicle. IE..Jeep lift kit.
Posted on 3/24/23 at 9:35 am to Turf Taint
Buy.
Posted on 3/24/23 at 9:39 am to Diamondawg
Probably buy right now. I haven’t shopped for a car in a while(about to in a few months) but I’m guessing with the increase in rates the money factor will be way high. If you can still get a low interest rate from a credit union your payment probably won’t be far off from a lease payment (where typically leasing is a much less payment).
Posted on 3/24/23 at 9:46 am to Im4datigers
Dealers are also offering low interest rate promotions pretty regularly right now. I've never leased so not sure if the same promo applies, but the purchase rates have been frequently advertised at 2.9% and below (several 0% in my market)
Posted on 3/24/23 at 9:59 am to lsujro
If interested in leasing go out to edmunds or somewhere and see what this months money factor and residual value % are for the model you’re looking at. Then compare that to what your dealer is offering. There are huge markups in leasing but plenty of flexibility for them to come down.
Posted on 3/24/23 at 10:42 am to Im4datigers
I leased one many years ago for my son. He was to make payments as he always worked while in college. As I recall, the biggest factors (other than the lease payment, itself) was mileage allowance and residual value at end of lease period.
ETA - for the last 20 years or so, we would buy low mileage Car Max like vehicles paying cash and letting someone else pay for the enormous depreciation that takes place in the first year or so.
ETA - for the last 20 years or so, we would buy low mileage Car Max like vehicles paying cash and letting someone else pay for the enormous depreciation that takes place in the first year or so.
This post was edited on 3/24/23 at 10:45 am
Posted on 3/24/23 at 10:51 am to Turf Taint
I'd look at slightly used and pay cash if you have it. Used market has really come down over last year and if you can find a very low mileage version of what you're looking for especially in luxury market you could save a huge chunk of change. Not sure what luxury sport sedan you're looking at but I'll use a BMW M340i as an example
A 2023 new one starts at $56,400 base, you would option that up well in excess of $60k like most people would as BMW has a ton of options people want.
I'm seeing 2020-2021's (same generation) in my area with 30k-50k miles on them for $40k-$45k range. I see 1 for $46k with just 13k miles on it.
A 2023 new one starts at $56,400 base, you would option that up well in excess of $60k like most people would as BMW has a ton of options people want.
I'm seeing 2020-2021's (same generation) in my area with 30k-50k miles on them for $40k-$45k range. I see 1 for $46k with just 13k miles on it.
This post was edited on 3/24/23 at 10:52 am
Posted on 3/24/23 at 12:17 pm to Turf Taint
Check out the sticky at the top of the board. There’s a few threads on leasing vs buying.
It works great for some vehicles, not so great for others. But you have to fully understand what you’re getting into and the pros/cons.
It works great for some vehicles, not so great for others. But you have to fully understand what you’re getting into and the pros/cons.
Posted on 3/24/23 at 1:24 pm to Turf Taint
Considering how long you hold onto a vehicle, buy.
Used prices are coming down at a good pace and will likely go much lower as used car inventories are expected to grow substantially over the next year as more and more people default on their loans (the most movement is currently in the sub-prime market). So hold off as long as you can and you could likely find an exceptional deal on something only slightly used.
Used prices are coming down at a good pace and will likely go much lower as used car inventories are expected to grow substantially over the next year as more and more people default on their loans (the most movement is currently in the sub-prime market). So hold off as long as you can and you could likely find an exceptional deal on something only slightly used.
Posted on 3/25/23 at 10:02 am to Turf Taint
Some leases require you to remain in state and return to dealer at the end. Keep in mind if you might want to move.
I would dread having to quibble with the a-hole dealer at the end about any damage/repair issues.
If you die, your spouse is stuck with the lease. Happened to a friend who leased a pricy car, and his widow had to negotiate her way out of it, taking a financial hit.
I would dread having to quibble with the a-hole dealer at the end about any damage/repair issues.
If you die, your spouse is stuck with the lease. Happened to a friend who leased a pricy car, and his widow had to negotiate her way out of it, taking a financial hit.
Posted on 3/25/23 at 8:09 pm to Turf Taint
Lease works great gor my wife but not for me. Some cars lease great and some dont. One thing you dont want to do is walk into a dealer looking to lease without understanding how leases work. I recommend looking around on the leasehackr.com forum to see what vehicles are leasing well and learn how to negotiate the best lease possible. Also, there are many good leasebrokers there that you can work with that can get you a deal with no hassle.
Posted on 3/26/23 at 8:18 am to Twenty 49
Do you know if more expensive automotive insurance is required? Technically would not own the vehicle, I suppose.
Posted on 3/26/23 at 1:04 pm to CharleyLake
quote:
Do you know if more expensive automotive insurance is required? Technically would not own the vehicle, I suppose.
yes you cant lease and run minimum insurance. anyone with any type of assets should have this insurance in place along with an umbrella, especially if you live in louisiana.
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