How Leasing A Car Became A $4,779.37 Mistake

(J Phang - Yes, this is an A5, but it looks cool.)

(J Phang – Yes, this is an A5, but it looks cool.)

Generally, any story that contains the phrase, “the salesperson talked me into…” is not going to end well. That was the case for personal finance blogger Michael Timmermann, who started out ready to buy a car in cash, ended up with a lease on a beautiful Audi A4. This wasn’t so bad until he moved to Washington, D.C., where he didn’t really need a car, but had to pay $300 per month to park his Audi.

There are completely legitimate websites where people can swap leases when their lives change or they just no longer like their cars. Unfortunately, Michael this wasn’t an option: Audi doesn’t remove the original lessee from the title, which would make him liable if the person who took it over stopped making payments. That wasn’t an acceptable risk to Michael.

Maybe he didn’t need an expensive car, after all. Michael notes that even before he moved to a major city, he only drove maybe ten miles a day. Sure, he was in a nice car for that period, but it wasn’t really worthwhile when there was nothing wrong with his old car in the first place.

The good news was that CarMax paid him $26,000 for the vehicle. The bad news was that with more than two years left on his lease, he had to pay CarMax $4,779.37 to take his car away.

Are leases a good idea in some situations? Sure. The problem is that often in life you don’t know when your situation is going to change. New cars depreciate, but being stuck in a lease that no longer works for you can mean taking a different kind of loss, like when Michael was paying to park the new car that he no longer needed.

My $4,779.37 Mistake: A Warning About Car Leasing [Save on (Almost) Everything] (via Rockstar Finance)

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  1. CzarChasm says:

    Sounds like this personal finance blogger is not very good with his personal finances.

    • GnRJosh says:

      I don’t know, he was able to hand over $4800, so he must be pretty good with it to have at least that much disposable income. What he’s not very good with is negotiating or, at the very least, not giving into sales pressure tactics. He wanted to purchase a car and allowed a salesman to persuade him to lease instead.