Leasing a car vs Buy a car

[Skooby]

Leasing, buying or leasing to own.

Which is the better route to go? Also, will doing either of these bring your fico score down?

[project15]

buying.

My wife is currently leasing a car and I fear we're going to be hit by a ton of fees when we turn the car in. If you don't take care of the car, that's what happens. And then when it's over, we have nothing to show for all the payments we made.

[momof1in150]

One of our cars is a lease right now. My DH did it this way and I have disagreed from the beginning but it was done without my knowledge so I am living with the lease. We had to carry a much higher insurance plan then with a direct purchase.

We have a VW touareg and it would have cost $40000 new. Our buy out next December is $16000. This car's current blue book is about $30000. It will be worth it to purchase it when we turn it back in. We will probably do a 1-2 year loan on the $16K so in the end it will take 4-5 years to purchase it. That is pretty typical of how we purchase cars. Would I lease again - NO!!!

If you are a heavy driver then I wouldn't lease. I have only put 11000 miles on the car in 1.5 years so I will be under on the mileage.

They pretty much have the same impact on your credit score. Initially it will go down a couple of points because of the inquiries and additional debt but the longer you are into the loan/lease it will raise your score because the history is longer.

[LivingAlmostLarge]

I think it depends. I've heard, never done personally that leased cars can be written off self-employed taxes. This is a reason to lease, but it really depends on circumstanes. Also I know a friend who has a leased car as a "bonus" from his company so I guess that's another reason.

[jmjj215]

I took a class from an entrepreneur that owned about 40 car dealerships. He said by far leasing is the dealer's most profitable deal.

That should be your answer

[Fern]

I've never leased and never will as i don't think it pays. Ditto what everyone else said.

[Ima saver]

The answer is "buying" Clark Howard calls leasing, "fleecing "

[poundwise]

Leasing is clearly the most expensive way to drive.

The main reason most people lease is so that they can drive a better car for a lower monthly payment than a purchase (in other words, trying to wrangle a way to get a car they honestly can't afford) or so that they can drive a different car every few years.

In the latter case, if someone wants to spend that money for that luxury, then that's their business. But, no one should ever be confused; leasing costs much more than buying, especially if you compare it to buying a car with a couple of years on it (and off of the depreciation).

Here is a bit from Edmunds.com on the subject:
Car Financing: Buying vs Leasing - Edmunds.com

[sakigt]

The only time leasing makes financial sense is if you turn in your cars every 2-3 years.

It would make more sense, however, to drive a car longer than that anways.

[bjl584]

I've never leased a car. I always buy them. I drive a lot, so I don't want to be restricted to the amount of miles that I can drive. Plus, I tend to keep my cars for a long time and I do all of my own maintance on them

[JBinKC]

It depends what you want. If you want a new vehicle every 2 years and can keep your mileage within the parameters of the lease I would say a lease. Otherwise I would buy and I believe you get the most bang for your buck if you consider a well kept car with a very high Consumer Reports track record that is in the 4-7 year old range as the most economical way to buy one as the costs to operate are lower from the impacts of depreciation, property taxes and maintenance most likely not going to be very high from repairs.

[disneysteve]

I agree with everyone else. Leasing rarely makes sense. It is a costly way to go. So if your question is what makes the most sense financially, buying wins virtually every time. And buying slightly used is the even better option over buying new as cars depreciate the most during the first 2 years. Actually, the best way to take advantage of leasing is to buy a car that is just coming in from a 2-year lease. Low mileage, good condition, already depreciated 25% or so. There are a ton of those out there and they can be great buys.

[LivingAlmostLarge]

Unless the lease is a company perk, then it's a nice deal. Free car, which you don't keep but better than nothing.