Leasing A Car
Watching those car ads on TV I've always thought the leasing options seemed like a fairly good deal, at least as far as monthly payments go. I knew there were some hidden costs, never mind the upfront costs that often get up to two or three thousand dollars.
This article on lewrockwell.com tells a little more about leasing and some of the terms. It wasn't everything I wanted to know. For instance, I wanted to get some tips on when you might want to lease and when it would be better to buy. He goes into that a bit. He thinks it's an option for those who drive less than 15,000 miles a year. That would probably fit me or the wife. Or someone who prefers a new car every few years. I would have still preferred some real life examples.
I was unaware there are monthly mileage restrictions on leased cars with penalties for going over your limit. That sucks, but how would they know how far you drove in a given month? I'm guessing you have to take it in to their shop for service and they figure total mileage divided by months?
He seems to think the best way to lease a car is a single payment lease where you pay all the money up front. Except then you'd have to come up with all that money to begin with. I suppose that's a good way to do it if you have enough money to make the one payment, but what if you don't? Maybe just go ahead and buy? Would it make sense to borrow money to lease a car?
One thing I do know is in all my years I've never heard one horror story about leasing cars so it must be just another option to consider- Six one way, half a dozen the other. Anyone have their own stories, good or bad, about leasing a car?
posted by Fred Mangels @ 7:10 AM
4 comments
4 Comments:
I've never heard anyone claim that leasing a car was a sensible choice.
I would have liked to see that article address the pros and cons, assuming there are any, of leasing vs. buying.
Only thing that comes to mind in favor of leasing is you wouldn't be stuck with a car you might not be all that happy with. If you buy one, you keep it til it's paid off than have to hassle with selling it. If you lease it, you just give it back after 3 years, unless you want to buy.
I'd be interested in seeing the actual difference in cost per year of buying vs. leasing, too.
There is a third option: buy a used car that is less than three years old. Since most of the depreciation occurs in the first year one gets a good car for significantly less money. I would suggested buying the used car from the dealer's lot that sells the brand of car desired and also going to carfax.com and kbb.com (Kelly Blue Book) to check it out prior to purchasing.
That's pretty much what we did when we bought the wife a used car in July. By accident, more than design.
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