5/23 is leasing better than buying, thinking of leasing
a new 2007 tundra for $236 a month for 3 years
plus $2k up front... thanks soda gods.
\_ Which one is better depends on your situation and the terms.
I bought my first two cars and leased my last two. I eventually
bought one of the cars I leased and now own it outright. For
my own situation, I would never "buy" again. I would always
lease and then only buy the car if I like it. It turns out
that in one lease I came out ahead by leasing (versus buying)
and in the other one I would've come out ahead by buying.
The interest rate, money factor, and residual will make one
better than the other financially (there are other
non-financial factors) but the difference in my experience is
relatively small compared to the price of the car. By the way,
I wouldn't put any money down on a car if you can help it
(lease or buy) but especially if you lease, unless doing so
somehow helps the interest rate.
\_ if i buy used, do you use the Kelly blue book value
to haggle with? i see people selling like $2k mroe than
KBB
\_ Just don't pay more than it is worth to you. You can
offer less if you want. They will sell if they want
and they won't if they don't.
\_ Just out of curiousity, what is your situation? I find buying
a used car my far the cheapest option. I'm still driving
a car I bought for $600 3 years ago. However, I know some people
used the cheapest option by far. I'm still driving a car I
bought for $600 3 years ago. However, I know some people
require a new car, like Real Estate agents.
\_ I think they don't have to be new cars, but they have to be
luxury cars.
\_ I think it doesn't have to be a new car, but it has to be a
luxury car. My ex-gf's father was a real estate agent in LA,
and he has two Mercedes. When he met the weathier clients, he
drove the higher-end and newer one. When he met the clients
that were less wealthy, he drove the older and lower-end one.
that were less wealthy, he drove the lower-end and older one.
-- !OP
\_ I should have mentioned that of the four cars I leased
one new, bought two used, and leased one used. Buy vs.
lease is the relevant question here, not new vs. used.
I personally would prefer a new car, because it should
last longer. My first cars were 2-3 years old and I saved
money up front, but in the end I wish I had paid $6-7K
more for a new model and gotten 3 more years out of the
car. That is why I bought the latest car brand new. It
is worth the extra $150/month to have the car an extra
3 years. As for reason, I hate having an old, unreliable
car that I am embarrassed to take anywhere. I keep my
cars about 10 years, which I think is reasonable.
\_ You are not your car. If it gets you from point A to
B there is no reason to be embarrassed by it.
\_ When you are standing by the side of the road
waiting for a tow truck, yes that is embarrassing.
I also like to have a nice car. I do not own a
car to get me from A to B at the lowest possible
price, but also in style and comfort. You might
have your own preference. Owning a 1981 Yugo
does not appeal to me. On the other hand you
probably spend money on crap that doesn't interest
me at all (e.g. most electronic gadgets).
\_ If it gets you halfway between A and B and then
breaks down it doesn't get you from A to B now
does it? And how did you decide that I spend
money on gadgets?
\_ It was just an example. Every car will get
you from A to B, but some do so more reliably
and safely (or even faster). My first car
got me from A to B, say, 99% of the time. Is
that good enough? For me, it was not. For
you, maybe it is. For a woman it is
definitely a big issue. I am a guy, but my
car overheated once at 11:30pm near an exit
that had nothing open but a grocery store 1/2 mile
away. (There weren't even any houses.) This
was before cell phones were common. If
that happens 3x over the life of the car
(say) that's too much for a lot of people. I
haven't had that happen to me in 6 years now,
because I actually bought a nice car. Imagine.
\_ "reliable" != "nice". There are luxury cars
that are pieces of junk, and inexpensive cars
which are reliable.
\_ Do you have a point? I am guessing a
$600 car is neither luxurious nor
reliable.
\_ Uh, I didn't write the above, although
he is correct. I have a reliable car
for my wife. -$600 car guy.
\_ Besides, for the price of a nice car you'd
have to buy insane amounts of gadgets to make
the difference. Unless expensive TVs are
considered gadgets.
\_ Sure, why not? People spend a lot of money
on whatever their passion is. Photography,
video games, eating out, whatever. The
point is that I can spend my money how I
wish and maybe I think what you spend your
money on is silly. I think some people
easily spend $500-1000/month eating out,
for example. My old coworker took his
girlfriend to Cheesecake Factory (ugh!)
almost every day at $40 a pop, because he
couldn't cook or didn't want to. The
payment on a nice car really is not that
much. OP says he can get a new truck for
$236/month. I think that's totally worth
it and would ditch the $600 car above in 3
seconds if I could afford that $236/month,
even if it cut into other aspects of my
lifestyle.
\_ You aren't thinking about total cost of
ownership. The $236/mo car probably has
an additional $1000/yr insurance cost and
an additional $2000/yr depreciation cost
over the old junker. I prefer to own no
car at all and put my money into savings.
Now I could buy the nicest car in the world,
but I prefer to save and take a cab when
I really want to live it up.
\_ "Depreciation cost?" I'm not writing
anything off. I buy the car and keep
it until the resale is $2-3K. So the
price difference is mostly the
purchase price. As for insurance,
most of the cost is liability, which
is the same either way.
\_ There is a huge difference between
liability and full coverage insurance
cost, especially for a new car. What
is the yearly depreciation cost? Do
you even know how to calculate this?
Take the amount you paid for the car,
subtract what you get for it when you
sell it and divide by the number of
years you own the car. For most cars
it is $2-3k/yr, if you buy them new.
\_ I've taken accounting and I know
what straight-line and double
declining deprecation are, but
they are not germane here. Just
look at the sale price and the
residual price to get an idea
of costs. There is no need to
amortize to compare expenses.
As for insurance, as I said
before, the main cost is
liability. For my new $45K car
I pay $300/year more for
collision than I did on my
1993 car. Almost all of the
cost of my insurance is my
liability coverage. In fact,
for a BMW and a Lexus my total
insurance bill is $600 more than
it was for my old Nissan and
Honda - and that was with no
collision coverage on the Nissan.
\_ So what is your total cost
of ownership for your $236/mo
car. I am looking at a quote
right now for $228/yr for
liability only vs. $851 for
full coverage. That is more
than a 3X difference.
\_ $228/year for liability?!
That's crazy low. In
fact, I don't believe you.
\_ Sorry. I have a good
driving record and am
married. That is what
we pay. I also noticed
that you don't understand
what the word depreciation
means and that you don't
\_ Sorry that is a quote
for $228/six months, so
$456/yr. And $1700/yr
for full coverage. If you
are older, married and with
a good record, that is
what you pay. Do you
know how to calculate your
total cost of ownership, so\
I think it is a waste of
time to try and continue.
car. Have you even bothered to
figure this out? I pay 3X for
full covereage vs. liability
only.
total cost of ownership, so
I think you are kind of
boring and stupid and a
waste of time to talk to.
Sorry about that.
total cost of ownership?
\_ Buy vs. lease is mostly about: how long do you expect to keep the
car, and how many miles do you drive? If you're going to drive
the car into the ground over 10 years then buy it. If you're going
to want to trade up every 2-3 years then lease. YMMV (heh). |
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