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Ups and downs of leasing a vehicle

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  • VarmintmistVarmintmist Senior Member Posts: 7,397 Senior Member
    edited November 2018 #32
    Unless you can write it off in a biz, and even if you can, a lease is a bad idea financially. If you want to keep changing cars, then it works, but it is still a bad idea financially. The write off makes it do-able, not a good idea, just transferring the pain to the overhead costs instead of the net.
    My truck is 11 years old. I put a lot of money into it this year. By a lot, I mean about 2 new truck payments worth. I will probably put 4 new tires on it soon, which with a F250 SD, is a bit less than 2 new truck payments. 2 years ago I put about 2 months worth of new truck payments in it.
    So will have driven it for 4 years for the equivalent of 6 payments.
    She is not new, but since I wash wax and clean it once or twice a year, change the oil and filters regularly and grease things the wonderlubes miss, the mechanics pretty much always tell me that its a nice truck. She has some character marks on her and 2 years ago I decided bondo was enough for a truck with over 100K on the clock. I do sand it and paint it and it looks ok.
    Due to some things going on, it WILL run for another 5 years min before I look for a replacement. As a bonus, I have been picking up OT every Sat so the boss is letting me home garage the company truck. I spent more on fuel for the generator during the power outage this month than I have put in the truck.
    If I lived out of the snow belt, I would figure on another 10 years, but the rust will likely be taking over by 5.
    It's boring, and your lack of creativity knows no bounds.
  • coolgunguycoolgunguy Senior Member Posts: 6,610 Senior Member
    My mom (no financial wiz) leased two vehicles, and I told her that she better not lease a third... but, the fact is that leasing might just be a decent option for her now that she drives so little.  
    "Bipartisan" usually means that a bigger than normal deception is happening.
    George Carlin
  • Troy800Troy800 New Member Posts: 25 New Member
    The the most expensive way to own a car is a consumer lease.  The second most expensive way is to buy a new car.  I'm not saying either is bad or you shouldn't do it if you can afford it.  Just realize it is the most expensive way to own a car. You are paying a super premium for the "New car smell". The depreciation in the first 2-3 years is huge.  The cost of ownership of the first 3 years is the largest due to the loss in value.  The loss in value far exceeds the maintenance cost on a reasonable car.

    I buy those cars that are turned in from a lease at half the price of new.  I then drive the car for another150k to 200k. Yes I have some maintenance and repairs but it is at the fraction of a cost of buying or leasing every 3 years.

    Just a rough example using big picture math.

    lease or buy at 3 years and drive  50k miles.  If you loose $12000 in depreciation that is 24 cents a mile.  Plus increased of Tax and insurance not included in calculation.

    buy a three year old car at $12000 + $8000 maintenance (which should be on the high side). And drive 150k miles that is 13 cents a mile.  My last car that I just got rid of was $10000 + about $5000 maintenance and drove 180k since purchase before I hit a deer and totaled.  Cost of ownership about 8 cents per mile.

    every cars depreciation rate and expected miles and reliability is different but you can use general estimates to figure you cost per mile to own.  I always buy cars with proven reliability history and drive to 200k plus miles.
  • shotgunshooter3shotgunshooter3 Senior Member Posts: 5,733 Senior Member
    Unless you fully intend to get another brand new car in 2-3 years, or you're writing it off as a business expense, a lease is the most expensive way to go. 

    New v used CAN be a different story. When I bought my Toyota Tacoma brand new, I paid several thousand less than identical 1-3 year old used models on the lot. I still haven't figured that one out. 
    - I am a rifleman with a poorly chosen screen name. -
    "Slow is smooth, smooth is fast, and speed is the economy of motion" - Scott Jedlinski
  • GilaGila Posts: 1,828 Senior Member
    I purchased my last car new, something I never do, because I bought it as a toy I intend to keep for the rest of my life.  I have now spent almost as much modding it as the purchase price with more mods in the works.
    No good deed goes unpunished...
  • zorbazorba Senior Member Posts: 23,650 Senior Member
    You Sir, are correct in that. It gives me considerable pride to be able to tell the owners of a certain brand of "premium" vehicle that "My car had been on the road for 5 years by the time your brand was created!"
    -Zorba, "The Veiled Male"

    "If you get it and didn't work for it, someone else worked for it and didn't get it..."
  • rberglofrberglof Senior Member Posts: 2,656 Senior Member
    My 2000 Tundra is about ready to get its third timing belt. Bought it from my brother for $10,000. He put the first timing belt in and I just ordered my second one, has 295,000 on it so far. I have put about 2500 dollars into it for suspension work, radiator and starter.
    I have bought a total pf 6 new cars and if you are willing to put in some time doing it can usually come out OK. Bought a new Buick in 1983 and granted only kept it for one year but got $200 less then I paid for it. That one took hours of haggling.
    Never had an urge to lease.
  • coolgunguycoolgunguy Senior Member Posts: 6,610 Senior Member
    We've purchased two new vehicles over the years, with the rest being used. Depreciation is a thing, and it should be read in ALL CAPS, bolded and underlined.  Our Town & Country was purchased in '02 and was very well equipped.  Everything except leather & power opening doors. Put 16K down on it and financed the rest.  Less than 3 years later, and with less than 50K on the odometer, I couldn't get any trade offers more than $8500... and that was purchasing a similarly priced and equipped newer T & C.  On that case, I would have done MUCH better to lease instead of purchase... but I'd have done better still to have just purchased a newer used vehicle and driven it until the wheels fell off.  If your deciding criteria is cost per mile of operation, by used and drive it a billion miles... but, be prepared to deal with vehicle issues over time.  If you're someone who wants/needs to have the "peace of mind" that a new vehicle offers, then go that route.  Don't get me wrong, I REALLY like new vehicles and I would happily play with all the goo gaws and gadgets for days on end... I just hate paying for them. 
    "Bipartisan" usually means that a bigger than normal deception is happening.
    George Carlin
  • Gene LGene L Senior Member Posts: 11,730 Senior Member
    I don't drive that many miles, but wouldn't consider a lease.  I don't want to drive domeone else's car.  My truck is 12 years old; I've had for four or five years or so, got 149K and runs fine.
    Concealed carry is for protection, open carry is for attention.
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