Did you buy or lease, and why?

i lease with intention to buy out. it was the best financial option for me, to keep the payment moderate and achievable. this is the first time I ever lease a vehicle, and it was an ok experience but I don't think I will be doing that again.

 

Good for YOU. Why are you posting on a forum at all? Why don't you stay free from "interacting" with people from your soap box? Do you just try to break your record of how many times you can type "I"?

And by the way, you seem to enjoy shaming people for spending money on what they love like vehicles and then you spout off about businesses or real estate. As if those "investments" also cannot lose value. Any business can go completely under and lose 100% of it's value. And real estate is not liquid and can also lose value. Tenants are not guaranteed either. Sold my last 5 vehicles for a profit after enjoying for a 1-3 years so who are you to tell everyone what is worth buying and what isn't?

Lastly, we are all here for a finite time so do what you want while you are alive. Sure, it's important to provide some security for your family but at the end of the day, you cannot take it with you.

 

Forums predate the term, so some people don’t even think of them as a form of social media.

 

Thanks for blessing us with this helpful information. I could have had FIVE kids, NO car payments, and played my used piano (I have one) for THREE hours a day. But, I chose not to.

 

You can have your riches
All the gold you saved
There ain't room for one thing
In everybody's grave

 

He is not wrong. Way too much debt in the country.

 

I financed my taco although the only reason I didn't pay cash was because the perfect truck popped up about a month before I was actually planning on buying so I'll pay it off later this month. I agree that debt is a serious problem unfortunately it's impossible for many of us (especially in my age group) to avoid, I'm 29 and just finished paying off ~75k in student loans earlier this year. I don't see any problem with people financing or leasing a car when they aren't saddled with mountains of other debt especially when you can get really great rates.

 

I’m also under 30, and I also chose to finance. My previous vehicle was a total loss and allowed me to put a significant amount of money down, such that I owed $25k on the new truck. While I had more cash I could have put down, it made more sense for me to keep the money I had in a high yield savings account and investments. At 1.9%, the interest I will pay is less than the savings account (2%) will accrue. Assuming the economy recovers sometime in the next 52 months, investments will help as well. So, for me, I have liquid savings that can be used in cases of emergency whereas if I had paid cash for the truck, I would have been ill equipped if I were to lose my job or have a medical emergency. But I recognize this isn’t the case for a lot of people who truly can afford to pay cash and not worry about dipping into their emergency savings.

Not saying my way is the right way, but I know a few guys my age who made the decision to pay cash for a car or put everything they had down on a house and then were SOL when something unexpected happened. I think avoiding debt is a good thing, but there’s a big difference between owing $10k in credit cards at 23% vs making informed decisions with very low interest rate loans like cars or whatever.

 

As an actuary I find this post interesting and the different opinions. In my mind I would ask myself the following

Do I typically hold vehicles longer than the lease period in question? Leasing then buying the truck will always cost more in totality then just buying outright in the beginning from a payment standpoint. Therefore if you hold it until the resale value is zero (it dies) then it makes sense to buy rather than lease. However, if you typically buy a new car say Every n years in line with say a typical lease period then with enough research and understanding Of the market, depreciation and resale value(expected miles being a huge input). You can determine if the buyout option is truly underpriced relative to the market value at the lease termination with the intent to sell immediately after the buyout. Considering the global pandemic and the effects on supply is a clear example that a lease could be profitable but since the alternative is also true then it’s a risk.

 

ok

 

Financed (bought). I’m 33 years old and it’s the first time I’ve ever done that. I only did it because it’s 0% APR. Had that deal not been offered, I likely would have waited a bit longer to pad my savings and pay straight cash. I’ve never leased a vehicle and have zero interest in ever doing that.

 

I financed, usually buy vehicles this way. I usually keep them around for many years. I would expect this truck to still be here with me 10 to 15 years from now. I try to add some extra $ with each payment. It always feels good to make the last one. I’ve never leased, but know lots of folks that choose to do so.

 

Bought. I drive far too much for a lease and it didn't make much financial sense for me. Especially for something that isn't really mine unless I decided to buy out. Even then I would feel like I'm getting screwed over somehow. It was better to just cut the shit and buy. I found one certified used which is probably the next best thing to new.

 

Good points made.
When I leased my Audis, I would sign 36 month leases at 7,500 miles and roll in the Audi Care, which is their preventative maintenance package. Audi Care would cost ~$900 upfront, but if you roll it in to the lease, it added ~$10 per month, but adds 1% residual. This pretty much negates the $10 per month addition as the 1% lowers your monthly payment since it adds residual.
I then waited for the buyout price to come close to market value, roughly 24-30 months in to the lease. Then I would head to the Audi dealership and trade the car in and use the buyout as the bargaining chip of how much I needed to get a deal done. Since there's a lot of padding in the pricing with luxury vehicles I never had an issue either getting the trade in I needed or a discount on the new vehicle to make it a wash in the end.

The monthly lease payments on the Audi A4, A5, S3 and Q5 equated to less than my monthly payments would be if I were to purchase a Tacoma with 60 month financing. Yes, I always had a car payment since I was leasing. But, I got a new car every 2 years and never had a single maintenance cost (tires, brakes, etc.). I would never put money down on the leases, other than the first month's payment.

If you plan to keep the vehicle longer than 5 years, buying makes sense. If you buy and sell right when the vehicle is paid off at 60 months...it's no different than leasing. You'll always have a monthly payment, typically higher than leasing. Just as leasing, you won't own the vehicle the entire time your making payments since the bank/credit union has the title.
As far as the mileage issue with leasing, just trade the vehicle in at the end of the lease for a new vehicle of any manufacturer. You don't have to do a lease return.

Leasing is really not that bad, if you know what you're doing. If you do it right and you don't keep a vehicle more than 5 years, leasing is the way to go.

 

Nope. Buy, never, EVER lease. Your TCO will always be higher on a lease. Plus, you get to pay $500/600 month for the rest of your life. Dumber is a five year lease (does anyone even offer one?).

I bought my Taco, sold it almost two years later for $747 less than I paid.

 

Rarely is a lease payment higher than a purchase monthly payment. If you compare apples to apples, $0 down lease and $0 down purchase. In a lease you're just paying the difference between the negotiated price and the residual over the period of the lease + MF and tax. For a purchase, you're paying the entire price of the vehicle + interest and tax.

If you buy a vehicle and finance for 60 months than sell it, buy a vehicle for 60 months and sell it, etc.....you're basically doing the same as leasing, just keeping the vehicle longer. You don't own the vehicle for the length of time you're financing, the bank or credit union does.
Now if you hold on the vehicles longer than 5 years. than yes buying is the way to go.

It's not a fair comparison to say you bought your Taco 2 years ago and sold it for $747 less to Carvana now. The pandemic is creating a never before expected market, that will not be seen again. You can't plan on the resale values being so high in the future.

 

Yeah, I know what a lease is and how it works. I sold them ;-)

 

You know what they say, never trust a car sales man.

 

Financing = Easy access to that equity (vs. lease buyout).

 

Bought mine because I expect to keep my 3rd Gen as long as my 2nd. 10 years before I gave it to my son. That was 4 years ago. Damn good trucks!