Does car leasing make sense? Seeking car buying experts

mr99

macrumors 6502a
Original poster
Jan 8, 2014
520
44
I'm looking into buying an Infiniti Q50 and am contemplating possibly leasing. I've always financed cars, never leased. My wife and I typically like to trade in and purchase a "new" car every 2 years or so, we don't usually buy new but usually buy a car a few years old. This time around i'm thinking about leasing. We don't keep cars a long time, 5+ years so eliminating the payment argument in buying is out the window.

The current car we own is a 2010 Acura TL, we've had it for 2 years and we only have about $1500 in equity weighing current value of the car vs. payoff. I know leasing leaves you with no equity at the lease end, but it seems the last car or 2 we bought, we almost have no equity anyway (with purchasing).

Any car buying experts on the boards care to help me figure out if it makes any sense?
 

maflynn

Moderator
Staff member
May 3, 2009
63,831
30,349
Boston
If you're replacing your car every 2 years then leasing does seem to make sense, provided you can live within the constraints of the lease agreement, e.g., mileage.
 

senseless

macrumors 68000
Apr 23, 2008
1,762
152
Pennsylvania, USA
Sometimes there are incentives to make leases more attractive. Look at the sales tax rate in your state though. In PA, it's 9% vs 6% lease vs buy. I could never make a case for leasing, really.
 

D.T.

macrumors G3
Sep 15, 2011
8,917
6,695
Vilano Beach, FL
Yep, if you typically have a short ownership period and can manage the mileage, it’s not a bad way to go. We had 3 BMWs that I would never have owned outside the warranty period, so with a lease (which we did on all 3) we had warranty and maintenance covered while we drove it, literally only had to keep it gassed up, turned it in, no further costs. With a lease, you’ve basically resigned yourself to always have a payment, which is OK, you also remove a concern factor about sudden, unknown expense.

Keep in mind, you still want to negotiate the price of the car (unless it’s a really good deal on one of those manufacturer promos) - you also want to negotiate (and be aware) of the money cost, just like you’re negotiating an interest rate for a traditional finance.

:cool:
 

heehee

macrumors 68020
Jul 31, 2006
2,462
223
Same country as Santa Claus
I always lease my cars. I would never buy a German car outside warranty, so leasing is the way to go for me.

Financing and buying out right is almost always the better deal and the more sensible way, long term wise, but so are a lot of other things. :D
 
Last edited:

AustinIllini

macrumors demi-goddess
Oct 20, 2011
10,754
7,361
Austin, TX
I always lease my cars. I would never buy a German car outside warranty, so leasing is the way to go for me.
This. Japanese cars are for buying, German for leasing.

If you go through a lot of cars or get bored of cars easily, lease.

But even then, leasing is usually throwing away more money than buying.
 

prostuff1

macrumors 65816
Jul 29, 2005
1,484
18
Don't step into the kawoosh...
If the vehicle is to be a daily driver and not abused then leasing can make sense, especially if you like to switch vehicles every three years or so.

My dad went form buying all this vehicles to leasing the last two cars.

He has said he would never lease a truck, if he intends to use it for truck purposes. If it was a glorified people mover then he would probably lease it also.

My current vehicle is an old Chevy S10 that I purchased outright and the next truck I get I will purchase also. I "abuse" my trucks to much with home improvement projects, camping trips, etc to ever stay within the lease terms. I take very good care of my truck, but I use them quite a bit so could never lease one and feel comfortable.
 

mr99

macrumors 6502a
Original poster
Jan 8, 2014
520
44
All valuable input, thanks guys. I know that we can stay within mileage guidelines and the vehicle won't be abused. I have a truck that we use as a TRUCK. My wife's car is our luxury people mover. I just want to run through everything possible before deciding to consider leading versus buying. I don't want to make an expensive mistake. All input welcome!
 

sdilley14

macrumors 65816
Feb 8, 2007
1,232
190
Mesa, AZ
If you're trading vehicles every two years, leasing isn't a bad option. I personally wouldn't go that route though. It's the difference between buying and renting. If you look around hard enough and do some negotiating, you can almost always find a quality pre-owned, new'ish vehicle for 5-10% below NADA value. So you drive off the lot with 5-10% equity on the car. Keep it in good shape, borrow at a good interest rate, make a little more than the minimum payments, and you should have some positive equity after 2 years.

And if you can sell the car "private party" rather than trading in then you should really have a decent chunk of equity to put down on your next car. Trade in value is where a lot of dealerships basically rob people. People are so excited to get into a new car that they don't really care that the dealer is giving them 25-50% less than NADA value on their trade.

I guess it's up to you the $$ amount you want to put on having piece of mind driving a leased vehicle that won't require much (if any) out-of-pocket maintenance costs.
 

Mr. McMac

Suspended
Dec 21, 2009
2,969
341
Far away from liberals
I've been happily leasing since 1996. Since I don't drive more than 10,000 miles a year, it works for me. I like that I get a new car every couple of years. Also don't have to worry about repairs since the cars are always under warranty. Right now I'm driving a 2014 Toyota Corolla LE. I'm paying $265 a month with no money down, tax included.
 

mr99

macrumors 6502a
Original poster
Jan 8, 2014
520
44
If you're trading vehicles every two years, leasing isn't a bad option. I personally wouldn't go that route though. It's the difference between buying and renting. If you look around hard enough and do some negotiating, you can almost always find a quality pre-owned, new'ish vehicle for 5-10% below NADA value. So you drive off the lot with 5-10% equity on the car. Keep it in good shape, borrow at a good interest rate, make a little more than the minimum payments, and you should have some positive equity after 2 years.



And if you can sell the car "private party" rather than trading in then you should really have a decent chunk of equity to put down on your next car. Trade in value is where a lot of dealerships basically rob people. People are so excited to get into a new car that they don't really care that the dealer is giving them 25-50% less than NADA value on their trade.



I guess it's up to you the $$ amount you want to put on having piece of mind driving a leased vehicle that won't require much (if any) out-of-pocket maintenance costs.

Well said, and understood. Selling private party is easier said than done and another thing to note about trading in is the fact you save a lot on tax. Even at a couple grand in positive equity, you've spent many thousands more over the payments made versus the lower lease payment.
 

sdilley14

macrumors 65816
Feb 8, 2007
1,232
190
Mesa, AZ
Well said, and understood. Selling private party is easier said than done and another thing to note about trading in is the fact you save a lot on tax. Even at a couple grand in positive equity, you've spent many thousands more over the payments made versus the lower lease payment.
All very good points. Trying to sell private party can be a headache and can take a long time.

As far as trading in and saving on tax. Yes, you do save on tax. However, taking $5k less than book value on your trade to save $1k-$2k in taxes obviously isn't an even trade-off.

And yes, lease payments will probably be lower and you will spend more $$ on financing payments over time...but you will also be building equity with those payments as well.
 

D.T.

macrumors G3
Sep 15, 2011
8,917
6,695
Vilano Beach, FL
Selling private party is easier said than done [...]
Plus there’s a good bit of time involved, dealing with looky-loos, contracts, taking deposits, potentially dealing with returning them, etc. Personally, my time is very valuable, whether it’s playing with my little girl or billing a client at $$$/hour. :)
 

hallux

macrumors 68030
Apr 25, 2012
2,774
485
I've financed my last 3 vehicles. I keep my vehicles for at least 5 years, except for one that I got rid of after a little over 2 years. When I bought the vehicle previous to the one I have now, they actually tried to get me to lease instead since I was "young" and younger people want to change vehicles more often, I kept that car for 6 years.

I could never lease unless it was a secondary vehicle, I drive too much. My current vehicle has almost 45,000 miles on it and it's not yet 4 years old (6 months to go).

If you change cars that often, leasing is probably better. When you buy a brand new vehicle, you have a much higher depreciation amount to amortize over the course of the finance/ownership period. On a lease, the depreciation is already factored in to what you're paying.
 

Apple fanboy

macrumors Nehalem
Feb 21, 2012
32,719
22,576
Behind the Lens, UK
I always lease my cars. I would never buy a German car outside warranty, so leasing is the way to go for me.

Financing and buying out right is almost always the better deal and the more sensible way, long term wise, but so are a lot of other things. :D
Almost correct. Buying outright without financing is the best deal usually. That's what I always do.
 

SandboxGeneral

Moderator emeritus
Sep 8, 2010
24,946
7,874
Detroit
I'm on my first ever leased car right now and I like it. My last vehicle I had for 11 years. Now I am on a 2-year lease and get a new car in 2016.

I now drive less than 10k miles per year, though you can get mileage constraints up to around 15k per year I think.

I like having a vehicle that will always be new and under warranty now.
 

maflynn

Moderator
Staff member
May 3, 2009
63,831
30,349
Boston
I'm on my first ever leased car right now and I like it. My last vehicle I had for 11 years. Now I am on a 2-year lease and get a new car in 2016.

I now drive less than 10k miles per year, though you can get mileage constraints up to around 15k per year I think.

I like having a vehicle that will always be new and under warranty now.
I drive well under 10k a year myself and wanted to go the lease route myself but when we got the truck a lease wasn't being offered. I think when my wife's car is due to be traded in, we'll go with a lease for that.
 

TimelessOne

macrumors regular
Oct 29, 2014
236
2
It really comes down to it depends.

if you only keep your cars for a few years then dump them then yeah leasing is a good deal.
I personally go with on the other side and drive my cars for years and go with driving them into the ground school of thought. My last car I had for 9 years when I replaced it. I was ready buy my first car I paid for plus it had a fair amount of work that just needed to be done to pass inspections so I advanced buying a new one a few months. I plan on running my current car for 10 years and drive it into the ground but that is me.

Keeping your car for a long time buying makes sense.
Only keeping it during warranty then leasing makes sense.
 

tayluftwaffel

macrumors member
Dec 1, 2014
64
0
it really depends on your personal needs for a car. I personally have purchased all of my cars on Craigslist, used. It works for me-- I love not having a car payment.
 

rockyroad55

macrumors 601
Jul 14, 2010
4,149
58
Phila, PA
Also, don't forget insurance costs. Leasing will require you to maintain, I believe, a 100/300 protection coverage or something similar to that. With a purchase, you're free to choose your insurance limits.
 

obeygiant

macrumors 601
Jan 14, 2002
4,003
3,761
totally cool
My commute is only like 20 minutes so I can stay within the mileage pretty easy. So I lease my car because the payments are about $250/month as opposed to about $450 for buying the same car.
 

mr99

macrumors 6502a
Original poster
Jan 8, 2014
520
44
Also, don't forget insurance costs. Leasing will require you to maintain, I believe, a 100/300 protection coverage or something similar to that. With a purchase, you're free to choose your insurance limits.
I run full coverage, what does 100/300 indicate?



My commute is only like 20 minutes so I can stay within the mileage pretty easy. So I lease my car because the payments are about $250/month as opposed to about $450 for buying the same car.

This is about what I'm seeing cost wise roughly. I see a lot of benefit to leasing. I know for my wife's vehicle we will have a payment for a long time as she likes to upgrade often.
 

rei101

macrumors 6502a
Dec 24, 2011
972
1
It all depends on the car. I have a BMW 330CI sport package from 2004. I am paying $260 a month without down payment. I have spent about $2K on top because it was used and had 80K miles already. But is a car I would like to keep. And can sell it later on but I do not want to feel tied (and that is me personally) to a lease.

Now, leasing a car can make sense for many scenarios. For example, my sister has a SUV leased, my brother in law do not like to spend time in mechanic and stuff. So, for a couple like that leasing is a solution.

My self... I like to mess up with the car here and there and travel anywhere, it is just ma nature.