I can either lease or buy outright cash for a new vehicle, what I cannot decide is which is better suited for me. My wifes car is a 2005 that while it still runs like a top with 74,000 miles on it, she wants a new car and at this stage of life she deserves what ever she asks for. Im keeping the 2005, removing the collision and using it as a everyday beater.
My thoughts are that I cannot do the repairs and maintenance like ive done on the 05 with a 2021, nor do I want to anymore, so keeping a car as long as I did the last one may not be the best idea.
Still being old school train of thought, I cant get my head wrapped around the idea of a lease and a constant car payment.
Whats worked for you and why...... Thanks for any and all advice and experience

Leasing is a good idea for someone who has plenty of cash flow and changes their mind a lot. If you have the cash flow to cover the payments then you just lease the car for a couple of years and turn it back in and get another one. It can work out okay if you really like the car and you don't get upside down on the buyout. There are of course some ways it can go really wrong.

Leasing also works for people who want to drive a nice car but are too poor to afford what they want to drive. They pay more in the long run but sometimes people can afford a monthly payment even though they can't afford to buy the car. You don't really want to be in that situation but sometimes people end up there. Leasing works pretty well for some business situations where you don't want to own the equipment, you just want to rent it or lease it. That doesn't sound like your situation unless you happen to own your own small business.

Not sure i agree with much of what was said above.

Leasing allows a person to drive a car under warranty that makes your monthly outlay known. Regards cashflow, most everyone who has a new car makes payments on it.
With low finance rates and money factors( lease rates) it can, in many cases, be foolish to pay cash. Rates are lower than what an intelligent money manager can make on the money elsewhere.
The average person in the US who BUYS a new car, has it for 40 months. So, they never own it either before trading or selling it. The vast majority of loans are longer than 40 months. Many are 72/ 84 months. So a person can have negative equity( owe more than its worth) in many cases. Such is not the case with a lease.
When leasing, one should be accurate about how many miles you intend to drive, and if necessary, have extra miles factored into the equation, up front.
Regards the comments above about those that lease being poor, couldn't be more wrong. Leasees typically are more intelligent than many others, have eXcellent credit, are responsible, and know what they want, have done due diligence investigating what might be best for them.
People that drive new Mercedes, Lexus, etc, by far and away lease them, not buy them. Not the poor person mentioned.
There can also be sales tax advantages in leasing. Here in Michigan, sales tax is 6%. You buy a new 30k car, you pay 1800 in sales tax. No matter how long you own( pay on) that vehicle, you are out that 1800 bucks. On a lease, you pay 6% sales tax on the payment. Example, you lease that 30k car for a 30 month lease. Payment is 300 per month.
You pay( including tax) 318 per month, so 6% of 300=18. So what is 18 bucks times 30. Its 540 dollars. So its almost 1300 cheaper than the tax on the buy was... that is a LOT.

Regards buying out your lease at lease end.... generally, if the lease payment was attractive, the buyout wont be. Seldom is it a good deal to buy it out. If the lease wasnt incentivized Looking at buyout figures might be worth looking at.

"Leasees typically are more intelligent than many others, have eXcellent credit, are responsible, and know what they want, have done due diligence investigating what might be best for them."


Not necessarily true. Looks like a pretty subjective statement. Any facts to back that up? Intelligence, responsibility, knowing what they want, etc; not anymore than someone that does not lease.

that might explain why high end car buyers often lease, many are lawyers, business owners, sales reps etc who use their cars for business

If they were leasing, wouldn't they hit the mileage cap pretty quick? Or are there different standards if its being used for business?

that might explain why high end car buyers often lease, many are lawyers, business owners, sales reps etc who use their cars for business

If they were leasing, wouldn't they hit the mileage cap pretty quick? Or are there different standards if its being used for business?

Just depends. I own my own business and I rarely put more than 5,000 miles a year on my business vehicle. Just because you own a business doesn't mean you drive a lot.

As a dealer, perhaps you can tell us something, on average does a dealership make a bigger profit on a customer who leases, or one who purchases a car with a loan?

Fair enough. I guess I was thinking of Houston where you can drive almost 100 miles and still be in Houston.............

My first lease was in 2006 - a 2006 Ram Quad Cab 4x4 Hemi - the sticker was around $36,000 as I recall. I put a total of $600.00 down, & my monthly payment was $162.00/mo. This was for 27 months. That's $4974.00. I probably could have bought the same truck new for $32,000 + tax - add on another $1920.00 for the tax, plus with other dealer doc fees & such, I'd be at $34,000. $34,000 financed at 5 years at 0% interest, would cost $567.00/month. Do the math. After 7 years, I'd be ready for another truck, & in Michigan, my 7 year old truck would be getting rusty most likely, & I might be able to sell it for $12,000. Then, I'd want another new one, but by 2013 that same truck new would be a $42,000 truck.

I was leasing at 10,000 mile/yr. as I don't drive it that much. Leasing worked beautifully for me - I drove a new truck every 2 years or so. I leased a 2006, 2008 & bought the 2008 off lease for a GREAT residual, then leased a 2012, 2014, 2016, & just a couple years ago bought a 2017 for a great price. The most I ever put down at lease inception was $600.00, & my highest payment was $272.00/mo. It all boils down to this: if you are going to drive anything, it is not going to be for free. If you buy a used beater, you are going to be paying someone to repair it, or you are going to be wrenching on it. Two years ago, I bought my wife a nice 2013 Edge while on a business trip in Vegas - it was mint & only had 63,000 miles on it. Paid $13,000 for it. Almost as soon as I got it home, it started "eating." Needed better tires for our winters here, then things started going wrong mechanically (probably because it is a Ford product - never again!), some things fairly major. Anyway, this turned out to be a bad deal for us! We are now looking at getting either a brand new Durango, or a lower mileage nice 2017+ used or certified one.

Leasing would be great for her if she does not drive many miles (under 10k a year), IF the lease deals are good! Personally, I would never pay over $275.00/mo. for any lease, & I would never put down more than around $600.00 at inception. Those were just my thresholds. Either way, none of us will never drive for free.

As a dealer, perhaps you can tell us something, on average does a dealership make a bigger profit on a customer who leases, or one who purchases a car with a loan?
I remember once some years ago I was trying to buy an Audi, and the salesman was pushing leasing pretty hard. In his pitch he asked if I had a business of some sort, as if I did I could write off the lease payments. This was over 15 years ago, I don’t know if tax laws are different now, but if that is the case, that might explain why high end car buyers often lease, many are lawyers, business owners, sales reps etc who use their cars for business and can write off the leasing, not because they are smarter or have higher credit ratings than the average guy.

Go git 'em, MasterShake!!!!

Don't believe any of the nonsense, credit rating, tax advantage, warranty, the ever-caring dealership, blah, blah, blah. They spout those lies because it benefits THEM, not you.

At the end of the day, all you have to do is take the best cash price on a vehicle and compare it to the all-in numbers of leasing or should I say renting Use the standard rule of depreciation of 30% when you drive it off the lot, 20% the second year, and 10% every year after that to compare to the same time period of renting.

And when you do, you'll realize the only people who rent are people who can't afford a new vehicle but don't mind throwing money away.

The only time I wished I leased was when I got a new truck that was a POS within the first 6 months. The dealer refused to do warranty work on it, because, they didn't care: they had my check. I could have drove to their front window, threw the keys on their desk and walked away from it if it was rented.

I couldn't give that glorious Blunder Motors product away: my Dodge dealer had to send it to auction


You honestly have zero clue what you are talking about.
I just showed you the tax advantage a few posts above. Its significant.
The reason a dealer wants to lease you a car is because they see you more often. Period.
Believe me, stuffing somebody in an 84 month buy because the customer has a payment to hit and has to go extended term to get there, does the dealer no good long term.
That guy comes back in say three years down the road wanting to trade it in, the salesman runs and hides( as he should) people are so buried You cant dig them out with a steam shovel.
2 or 3 year lease, customer comes in, you don't run and hide from them.
Leasing indeed isn't for everybody, but for some its exactly the right thing to do. Seen lots of 90 grand cars you can drive 2/3 years they are worth 45k. But you can lease them for 699 a month, use the best part of the car’s life, and toss the keys back.
IMO, the best way to purchase an auto is to figure out what you want, find a couple year old unit that is still under factory warranty, and drive it till its time to scrap it.
But, American consumers seldom have such common sense to do that. Gotta impress the Jones’s, momma gets tired of it, wants something a different color, you name it.
While i was racing today, we lost a deal because of color. Customer drove a car( previous customer too), they absolutely loved it, had everything on it they wanted, loved the price.... but it was Navy blue, not Black.....they keep looking......we still have the blue one..lol

Gosh, that is a sad story. Let's take up a collection.

Care to comment on the completely offensive $160.00/hr shop rate while some Grunt in the back does all the dirty work for minimum wage?

I would like to take this opportunity to thank Craigslist and the Internet for taking a massive bite out of dealerships gravy: trade-ins.

Gosh, that is a sad story. Let's take up a collection.

Care to comment on the completely offensive $160.00/hr shop rate while some Grunt in the back does all the dirty work for minimum wage?

I would like to take this opportunity to thank Craigslist and the Internet for taking a massive bite out of dealerships gravy: trade-ins.

Hey Grizzled - what's your beef? You don't like new car dealers? Where U going to buy your next new car - where will ANYBODY buy new vehicles? Back in early 1994 my business was real slow during the winter months so I wanted to try selling new cars - a Dodge dealer hired me to come & sell. TYPICAL deal - called a "mini" put $75.00 in my pocket, & it was a lot of screwing around to sell a single vehicle, plus we HAD to be competitive. Shoppers are not stupid, & they are out shopping the dealers looking for the best deal. YOU DON'T SELL A CAR FOR STICKER! A good mechanic makes good money, and amazingly enough, the dealers need to be able to keep their lights on - in case you didn't know this.

Don't worry how much $$ they are making, worry about your car & your deal. If nobody made a profit on anything, we'd all be living in Zimbabwe.

Its amazing more people cant figure this out. And it seems the Mopar community is more infested with such thoughts than most anywhere else, for whatever reason.

I bought a new vehicle outright with cash for my business in 2017. In those 3 years, I have put 120,000 miles on the vehicle. I knew that would happen, and so it made sense for me (the business) to go ahead and buy. Even burning up about $40,000 in cash that year on the purchase didn't hurt, because the business had a "good year" and "made too much money".

I know a lot of businesses lease fleet vehicles, because they become a monthly cost that can be swung with the cash flow of the business. Owning things is a different consideration for a person vs. a business. Both owning and leasing can make sense, but your situation and expectations will dictate what you consider success!

I haven't seen anybody address the cost of financing the lease vs outright purchase.

Many moons ago I signed a 48 month lease on a 2 year old Ford Contour. Cosworth headed V6 with a 5 speed. Absolute hoot to drive.

Salesman gives me the sales pitch on lease vs purchase and to the effect of you have all the car but you only pay for half of it. The part of your brain that still believes in free lunch signs the contract. $250 ish a month for 48 months with IIRC a $7kish residual.

I go home and I'm looking over what I had just signed and something doesn't add up. It was like a $12k plus tax car but the cost to finance was approaching $4k. I run the numbers through a calculator and that's about double. So I call them up and say I think there is an error and then he tells me well you're only paying for half the car but you're financing all of it. So much for the free lunch...

So I ask if it's to late to convert this to a purchase and he's good with that but he prefers leases because as has been pointed out, he gets another shot at me at the end. So long story short it cost me $100 a month more to buy it, the bank financing was a little less percentage wise and when I made the last payment, I owned it for the $4800 I paid extra over 48 months instead of $7k.

I'm in the leasing is the most expensive way to have a car in the driveway camp. If you can't afford to buy that new car you want, you should just make peace with it and buy the one you can actually afford.

Kevin

We really got into a heated debate here. We went from the topic "Leasing or buy outright" to what it cost to run a dealership and what techs get paid.
To the original poster who started the thread; I hope you found your answer somewhere in this mess.

We have leased at least 8 times now it keeps our money in the bank and investments without having to take out for a purchase. It keeps my wife in a new dependable car she deserves for the work she does and hours she puts in especially now with her 30 mile one way commute. She is now in her third Acura RDX which she loves even if it is the " tech " model with half the stuff we don`t understand or know how to work. In the 8 leases we have had the end of term buyout was always way too high for the age and value of the car. We have at the end of each lease term considered just purchasing with payments only being a little more depending on down payment or just purchasing out right but as i said we/ she prefers to have the money in the bank for " emergencies". Another thing we consider : in the lease term it is unlikely the car will need any major repairs or maintenance after a few years and miles repairs on cars like her Acura can get very expensive. I am pondering now : my 08 H.Q.C. is 12 years old now I really only use it for towing it has 57,000 miles but it is starting to need minor repairs, no big deal I fixed them : trans line bracket rusted thru, power steering cooler developed a leak, front cv joints and ball joints, idler pulley went bad and a few other things , do i replace it with a new one,( its been paid off for years ) or just keep fixing the little things ? New trucks are so expensive i don't know if its worth it to buy a new one to only use once in awhile.