Repeat
[consumerist.com]

You win until you pay $600 a year in property tax. Boooo.

#1 alone should show you buying is better than leasing. If your trading in your car every 2-3 years, you either have lots of disposable income or are financially stupid.

Spellcheck: Texas, not Teas

"keep a car well past the day the loan is paid off (or you paid cash to begin with)."

Honestly, I can't understand why would wouldn't buy a car and drive it into the ground. Leasing only makes any sense if you buy into the auto maker's propaganda that you need a new car every two or three years.

Meanwhile, I've been driving the same vehicle since 1999, and haven't had to worry about a car payment since 2002. The biggest expense so far has been a rebuilt transmission—far less than what the payments would be on a new car.

And the great thing is, by not making a payment now, that money goes into savings instead so that when it finally is time to get something new, I'll be paying cash.

OK... but what about the fact that after all those payments you have NOTHING, NADA, NIENTE, ZIP, ZILCH, NICHTS... Renting vs. Owning. Only one way to look at it for me.

the people who are against leasing fail to realize that cars are DEPRECIATING ASSETS.

@privatejoker75: not everyone looks at a car as an investment. if you are the original owner of a car that is 15-20 years old, it's safe to say you don't care how much your car is worth, it's just something dependable that gets you around.

@DeltaPurser:

Back in the day I leased a 2002 Subaru WRX for 0 down and $300 a month for 36 months. 3 months before my lease was up I found a buyer. My buyout was $12,000. He bought it from me for $14,500 (only had 25,000 miles on it). I recouped about 8 months of those 36 months of payments. Not bad for having NADA, ZILCH, NADA etc.

No, we realize cars ARE depreciating assets, and then when 1/2 of the depreciation is in the first 3 years, but it actually has real usable value for 10+, paying 3 years of depreciation every 3 years SUCKS.

Yeah, I could "afford" a cheap BMW if I had leased it instead of buying the Mazda hatch. But after 3 years, I'd have had to turn back the BMW in. The Mazda hatch is paid outright, and should be good for another decade before I replace it.

It's not about leasing something better because you can't afford the payments. For me it's piece of mind. I'll pay $300 a month for the rest of my life in exchange for never having to worry about repairs and being able to thrash the hell out what is basically a rental and getting something new every 36 months.

Sarcastically I ask: " Why is it called 'leasing' versus 'renting?'

The problem is that people looking for the cheapest deal get shafted on leases. These are not the people who would be reading Kiplingers or Consumerist. Funny to read the article and see the comments below.

And item #5 is a complete cop out.

the best advice, (i work in used car biz) is to find a car that you like so much, you wouldn't mind driving it for the next 10 years or more. if you can't see yourself driving it for 10 years, don't buy it. sure there will be new model version of the car you bought, but quit camparing. you'll never fully be able to keep up with the industry anyhow.

@PRIVATEJOKER75 - Yes, cars are a depreciating asset. So why on earth would I want to pay for the topmost part of that depreciation when I can buy used and let some other sucker pay it for me???

@privatejoker75: And you have made the exact arguement I was thinking about why NOT to buy a leased car.

cars are more of a status symbol nowadays. it's all about the image. if you are worried about what other's think of you, maybe getting a new car every 36 months is for you. but to me, as long as my car is quiet, and runs good, i could care less how new it is.

Buy used!

Or Pre-owned or slightly soiled or whatever the latest euphemism for it is.

@Keter:

Because some people consider a car to be a status symbol, even a reflection of their own self-worth. Car dealers absolutely love these folks. They need to be driving a new vehicle every three years. For them, leasing may be the best option. They probably aren't reading The Consumerist though.

@privatejoker75: If you buy a dependable car, and take good care of it, then this "peace of mind" factor is not a real issue. It's possible that your car will give out, yes. But in that case you can either fix it for much more cheaply than buying a new one or you can just buy a new one. If you can't get your car to last more than 5-7 years, you're doing it wrong somehow. Either that or you are one of those people who drives a ridiculous amount of miles per year.

@ClayS: thief! just kidding. my post above yours says exactly what yours did.

For people who already trade in their car every 2-3 years I think the only real thing against leasing is its complexity. That is there seem to be alot more places where a dealer can change the numbers just a little bit to make a bad deal sound like a good one.

The comments on the Kiplinger site really detail out the pros and cons. I think this is definitely different for everyone. In Texas, we dont get the sales tax break AND we drive high miles. I can honestly say that I am not the best with taking care of the outside of the car (mechanically, no probs), so buy and hold is my strategy.

i don't like being told how far i can drive it. (which is the way i look at it when you stipulate how many miles i can drive.)

Do a cost analysis of leasing vs. renting. Say leasing saves you 150 a month. If, for the 36 month least, you actually put away that 150 a month, you now have $5400 dollars. If you invested it, you might even have 6000.

Thinking this way, if you lease 36 months, you then have the down payment needed to buy your next car :) (did this myself, had the money i "saved" by not buying put into a mutual fund, then bought a car after the 36 months is up).

@snoop-blog:

I know, when I hit the return key to post it, yours was a couple of posts ahead of mine. Apparently, I type too slowly.

Anyway, my Honda snowblower is worth more than my Honda Accord. I bought the snowblower new.

@Keter:The average american keeps a car for 5-6 years. What's the difference if i use the first 50% of the depreciation or the last 50%? My 50% is warranteed

@privatejoker75: most new cars have excellent warrantees.

I still prefer my 6K car, that I will use for the next 5-6 years. It will serve as good, and with good care, even with repairs it will be MUCH more cheaper than leasing. (Though it's a Civic, and these ones last a looong time.)

Another place you get hosed on leasing is insurance. If you keep your car past the point it's paid off, you can set much higher deductables or do away with collision/comprehensive entirely. With a lease you can't ever do that.

This, of course, is assuming you are a driver who doesn't tend to crash.

@privatejoker75: Because the depreciation is steepest in the beginning?

The main financial gain from buying vs. leasing occurs, as the article says, when you get the keep driving the car long after you are no longer paying for. A lease might well be cheaper if you are buying a new car all the time, since you would be making payments anyway.

From a guy who used to sell cars - this article is spot-on, EXCEPT: if you drive more than 18,000mi/yr, the additional mileage charges will turn the equation on its head (even when you factor them in up-front) and buying is the way to go. I've done many, MANY workups with this and in every case, without exception, 18,000 seems to be the magic number for extra annual miles on your lease. Under 18K, lease. Over, buy.

@winstonthorne: CORRECTION: not "extra" annual miles, just annual miles. When I'm at work I'm motivated to type faster than I think.

depriciation is sometimes helpful, if your vehicle is used for you business. mega tax break.

Long time lurker, first time poster.

Much has been said about the "image" people are trying to set, but I have to disagree on that part. For me, safety is #1. If I know that my family has a better chance surviving a crash in a recent model car then an older one, I do not see, that getting a new car is all that bad. I rather have a lease payment (and with our local car dealer, free maintenance for life), then saving a few bucks. Like a poster above said, cars are depreciable, and in my opinion, the worst and unavoidable investment anyone can make.

i have a hard enough times keeping track of the minutes i use on my cell phone, i don't want to have to do the same thing with my car also.

@winstonthorne:

I don't think your math quite works out. With a lease, you are always paying. When they lease is up in 3 years, time to lease again. You have nothing. When you buy, the car is yours until you get rid of it.

My last car I drove for 7 years before someone smashed into me. I paid about 8k for it. Paid it off in 4 years. Thats 3 years with no car payments. (numbers are estimates here) I paid around $200 a month for 4 years= $9600. Which means over the next 3 years I saved around $7200 by driving a paid off car.

If I had leased a car for those 7 years, say for $150 a month, over the course of 7 years, I would have spent $12600.

No matter how many miles I would have driven it, I still made off better financially.

i would say lease an audi, buy a honda.

@darkjedi26:

Again, that's fine, if you want to drive a 7 year old car. For someone who wants to drive nicer, newer cars, leasing can be a good deal. Certainly, buying used and keeping a long time is the most cost-effective way to get transportation, just as living in a studio apartment is more cost-effective than living in a one-bedroom, and buying groceries is more cost-effective than eating out. Question is always, what do you want to spend the money on?

@snoop-blog: "the best advice, (i work in used car biz) is to find a car that you like so much, you wouldn't mind driving it for the next 10 years or more"

Or just don't care what you drive as long as it goes. :) Not only do I not care what my car looks like or what name is on it, I kind-of can't figure out what's wrong with people who DO. (Like, oh, my husband.)

The only reason I can see changing cars before this one is dead as a doornail would be if we had a pretty large family before my car dies (unlikely), as I drive a compact.

You cannot "thrash the hell" out of leased cars-- they have to be returned in nearly mint shape, with decent amount of tire tread, no significant dings, window cracks, etc. Also, they have to be maintained according to schedule. Before they are re-sold they are brought back to tip-top shape.

i sold mercedes a few years ago, and i can tell you that modern cars with all their electronics are not something you will want to fix with your own wallet. Electronic issues are pernicious and tenacious and will drive you mad.

You only lease a new car for the length of its comprehensive warranty, no longer.

Lease rates are also usually a lot lower than finance rates.

I've done the math many times folks, considering many variables. Leasing two new cars over 8 years is about 0-10% more expensive than a 60 month loan to buy one car and keeping it 8 years.

by the way, it is predicted that most large consumer items will be leased in the future, as it gives companies incentive to design better products or design them for easy disassembly and recycling.

People don't purchase cars just because of finances, otherwise we'd all be driving tiny little cars. Also, many of us make all sorts of changes every year: New dinnerware. Different wall art. New drapes. Why should you dump on someone because they want to drive a new car over 2 to 3 years? And c'mon, it's not all status, we're talking VW's and Hondas and Fords for most of us, not Porsches or Mercedes.

(My paid off car is 6 years old.)

I leased a car in South Carolina, where auto sales tax is capped at $600. When I moved to Texas, several years later, I had to pay Texas the full sales tax on the value of the car when I leased it (less the $600 I paid in SC) before they would issue a registration.

@bbbici: so if i bought a NEW mercedes, it wouldn't come with a warantee that covers the electrical system?

My wife was one of those people who felt like she should always be paying a car payment. A couple of year ago, she started to tell me that we needed to go car shopping. I ask why? She said because her car is almost paid for so it is time to get a new one.

What I say? Well a newer car will be under warranty and stuff like that.

Well I finally got her to believe that we did not need a new car - we own both our cars, and we should drive them into the ground before we get a new one. And for the past 2 years, no car payments - and probable a total of $500 for engine work that probable would have been covered under a warranty if we had one - but 2 car payments that we no longer make covered that cost pretty quickly.

Car Lease? Even after reading the above, it still makes no sense to me why it would be better then buying. (except for those few who like to always be driving the newest thing) - but I would hate to see them lose their income, and then all of a sudden lose their car too since they can't make the lease payment.... if they bought it, at least they would still have a car..... probable those same people who decided to risk their house payment on a non-fixed rate loan and are now crying about it waiting for the government to bail them out of their own mistake.

@balthisar: drapes, wall art, dinnerware, its still mostly about status.

@balthisar: also nobody leases drapes and dinnerware, although maybe wall art....

Ask for the exact calculations on how those lease payments are calculated. Check to see if you're actually being charged more based on how much cash you put down. Leases have got a bad rap deservingly so.

@balthisar:

Keeping up with the Jones'.

Thats pretty much why debt is running rampant in our country.

And getting new drapes or dinnerware isn't something most people would finance over the course of a few years. Your talking about making a commitment to continue spending thousands of dollars every year. I'd love to have a new car every few years, but financially, it just makes zero sense.

@bbbici: i would lease a mercedes. they're not fun to get fixed. but then, i would never drive a mercedes. personally, i think they're crap. bmw makes a much better vehicle for less. i would buy a bmw (if i had $40,000 to blow on a car, which i don't).

your "prediction" is interesting...i wonder who exactly came up with that - the consumers or the manufacturers?