Buy or Lease - what say you?

I think it mainly boils down to this....Leasing makes sense when:
-You want to upgrade to the latest model every 3 years
-You only drive 12k-15k miles per year
-You want lower monthly payments for nicer tech/luxury
-You want peace of mind of not having to worry about out of pocket vehicle expenses because you are covered under warranty for the whole lease.

 

I will start off by saying leasing isn’t smart for everyone and to each their own. My parents keep vehicles for 10-15 years so they would’ve stupid to lease.

I also used to think leasing was stupid until I actually took the time to fully understand it. Now I lease my Taco and my wife’s Grand Cherokee Trailhawk. I lease for the lower monthly payments and the flexibility.

The Jeep:
36 mo/36k
MSRP $48000
Residual $28500
Lease Payment $525

We will never own this out of warranty so I have no intention of buying. Hence the lease. Drop the keys or trade it in when it’s over and save a couple hundred $$ a month on payments.

The Taco:
36 mo/36k
MSRP $39000
Residual $27800
Lease payment $399

In the PNW used Tacomas are almost as expensive as new and I wanted to make sure this is what I wanted before committing to a larger payment and possibly being upside down. I only run about 6k Miles’s a year so this will obviously be worth more than $27800 when my lease is up so if it proves reliable I’ll buy it. Or maybe I’ll buy it sooner if I want(see flexibly).

My dealership also includes a $0 deductible ding and dent repair at no cost on all leases. So those of you using that argument for not leasing a truck are off base. I also get free key fob replacement for up to $500 a year for 3 years. Already stocked away a spare fob on that one.

One thing a lot of you are missing is that residual is like a savings account. During my lease I pay $0 tax and $0 interest on that $27800. I only pay tax and interest(money factor) on the depreciated amount of $11800. And that only gets paid monthly. Meaning that $3500 in tax that would be paid up front or rolled into a loan for a purchase, I get to only pay on each months payment amount. All the while those that roll it into the loan are paying interest on it for 3-7 years.

At the end of my lease I may have paid slightly higher cost to the dealer/bank than a purchaser. However I will have been pocketing an additional $200+ a month on payments that I can use to pay down that $27,800 that has been sitting there not costing me any interest.