Automobile:Buy Vs Lease

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I am new to this forum. I want to know how to decide between buying or leasing a car. I thought this was a frequent query but could not find anything in the FAQs or sticky threads. Please point me to a discussion on this topic if it already exists. If this is a new topic, I would love to hear your opinion.

I am considering a luxury brand car in the $35K-$45K range and am still researching which brand to choose. I live in California's San Francisco-San Jose bay area.

Thanks in advance.

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I think that how long you keep the car is probably the #1 factor in determining whether to buy or lease.
If you're only g... (more)

jagec (Nov. 18, 2013 @ 10:19a) |

It is; It's a purchase for 72 months at 980$/month. That being said after 36-39 months you can return the car and get th... (more)

alamo11 (Nov. 19, 2013 @ 1:29p) |

I think buying a new car actually does make sense in some cases right now.  Looking at used cars most in the non-luxury ... (more)

jumi (Nov. 20, 2013 @ 7:52a) |


I'll just answer your question for you.

Buy used!!!

If you're looking at luxury buy at ~30k miles for the same vehicle that cost $40k new could probably be bought instead for maybe $20-25k. And then sell it under 70k miles for ~$15k.

You could actually do much better than that, but since you actually posted that you were considering buying a new car something tells me you don't want to jump through the hoops required to do better.

Nor am I really in the mood to explain it at the moment. Maybe SiS will come in and explain it you if you're that interested.

Crown Vic. </thread>

I agree with buy used as well, unless the new is about the same price as the used.

Here's a how to buy a new car thread.
http://www.fatwallet.com/forums/finance/1001920/

If you're set on getting a new one, once you have an explicit or implicit purchase price based on buying or leasing, do a buy vs. rent calculation as you would with a house.

I'll say the general mistake people make with leases is that they buy more car than they need because the monthly payments are lower on a lease. Or if they put high mileage on the car, they get stuck with fees when they return it.

Can't wait till SSR posts about how much he is in debt due to his luxury car payments, probably mortgaging an expensive house and has huge student loans. Seriously dude don't waste buying a $40K car.

dshibb said:   I'll just answer your question for you.

Buy used!!!

If you're looking at luxury buy at ~30k miles for the same vehicle that cost $40k new could probably be bought instead for maybe $20-25k. And then sell it under 70k miles for ~$15k.

You could actually do much better than that, but since you actually posted that you were considering buying a new car something tells me you don't want to jump through the hoops required to do better.

Nor am I really in the mood to explain it at the moment. Maybe SiS will come in and explain it you if you're that interested.


So what kind of cars do you see that drops by that much, Dshibb? Lincoln is not luxury.

The days of buying a 2 year old car for half the price of a new one are over! There are times where it makes sense to buy a 2-3 year old used car, but many times when it does not. You're a fool if you are beating the "never buy a new car" drum.

Each region, make/model is different. You have to do your due diligence as a buyer, and not rely on some fool posting on an internet forum!

Usually the lease specials are for ultra low mileage leases (7500 miles a year) if you're driving that little, buy some old jalopy.

If you get a car every 3 years anyways, leasing is a good option. It is basically the same as buying and trading in after three years except that your mileage is limited and the trade in price is guaranteed at the time of purchase.. Some manufacturers like BMW subsidize their lease programs pretty heavily and you can sometimes get a good deal.

dishdude said:   The days of buying a 2 year old car for half the price of a new one are over! There are times where it makes sense to buy a 2-3 year old used car, but many times when it does not. You're a fool if you are beating the "never buy a new car" drum.

Yup, definitely agree on that, especially when it comes to popular Japanese brands. I see people asking 14-15k for a 2010 base Accords. Pretty sure you can get a base model new one for ~19k.

cr3s said:   dshibb said:   I'll just answer your question for you.

Buy used!!!

If you're looking at luxury buy at ~30k miles for the same vehicle that cost $40k new could probably be bought instead for maybe $20-25k. And then sell it under 70k miles for ~$15k.

You could actually do much better than that, but since you actually posted that you were considering buying a new car something tells me you don't want to jump through the hoops required to do better.

Nor am I really in the mood to explain it at the moment. Maybe SiS will come in and explain it you if you're that interested.


So what kind of cars do you see that drops by that much, Dshibb? Lincoln is not luxury.


You haven't spent that much time looking at car pricing have you? Almost all of them do. German(BMW, Benz, etc.) fall like a rock because of the prospect of high repair costs beyond 100k miles. The problem is that they keep falling like a rock until all of a sudden a Civic or Corolla with 100k miles is worth more than many BMWs with 100k miles.

If I was looking at luxury it would be Acura, Lexus, Infiniti, and Cadillac. Nice fall off at the start and then it's a not very steep after that.


And any manufacture can be luxury if they do it right. You should take a look at a Hyundai Equus Ultimate. If you would rather own let's say a BMW 5 series you would be a fool and too attached to name.

dishdude said:   The days of buying a 2 year old car for half the price of a new one are over! There are times where it makes sense to buy a 2-3 year old used car, but many times when it does not. You're a fool if you are beating the "never buy a new car" drum.

Each region, make/model is different. You have to do your due diligence as a buyer, and not rely on some fool posting on an internet forum!

Usually the lease specials are for ultra low mileage leases (7500 miles a year) if you're driving that little, buy some old jalopy.


Just went and double checked a few places to make sure I'm not losing my mind.

Nope you're just full of $hit. Huge depreciation off of new is still there in most models that start above $1x,xxx new.

I don't think he's full of it.

I am moving back to the US from Switzerland and will need to get at least one car to hold 2 adults and 4 children. I am considering 3 vehicles (new or used): Honda Pilot EX-L 4WD, Toyota Highlander SE AWD and Mazda CX-9 Touring 4WD.

Honda Pilot: new would cost about $33,000 versus used 2011-2013 within 50 miles of MSP would cost $28k 2011 with 35k miles to $34k 2013 with 1781 miles.

Toyota Highlander: new would be about $33,000 versus used 2011-2012 with 9k to 35K costing $28k to $34K

Mazda CX-9: new is still around $33k versus used 2012 at $23k with 31k miles

So while the used Mazda appears to be a deal, the Toyota and the Honda seem to be "holding" their values better. Personally, I struggle with getting a used Pilot or Highlander for "only" a 10% discount off invoice (it is more off MSRP but seriously, MSRP is not what most savvy consumers would pay) when you are getting a 1 or 2 model year old car that could have a problem (albeit unlikely) and is out of warranty.

Even older models of these cars are going for silly prices. 2008 Honda Pilots are listing for nearly $22k with 80-90k miles, yes there are the odd one offs that get sold for a value but those seem to be few and far between.

I have tried setting a filter for SUV/Sedans/etc on cars.com of $15k or less with 100k miles or less and it is a bunch of econoboxes that are from 2008-2009. I can go get a new Toyota Camry/Honda Accord base model for $22k and have a new car warranty and new car smell.

Yes, deals can be found but I agree with the other posters that there are not as many deals as there used to be and in some cases it might not be a horrible idea to consider new.

Also, I apparently am not looking in the right places since you know where to save huge money by buying used. I really do want to save a bunch of money so can you provide a few examples of 1-3 year old cars that have around 30k miles and are tremendous bargains?

This took me all of 20 minutes.

Honda Pilot: 2005 54k miles $13k, 2012 8k miles $27k, 2008 60k miles $19k (the last isn't that great of a deal)

Toyota Highlander: 2004 75k miles $10k, 2012 24k miles $24000, 2006 $14k 65k miles (Does this compare to me picking up a 2004 3 years with 33k miles for about ~$13k? No not at all, but that was a sick deal then. Today it looks like patience could yield you an 06 30k miles for probably about ~$19k)

Mazda CX-9: Low supply in the area a couple about where you see and one 45k miles for $20k

Clearly dealerships are getting more brazen in insane pricing, but deals can still be found. They're not as good as they used to be, but that doesn't mean even throwing away $5k on $30-35k new pricing right out of the gate. Also, you just have to open up your search scope a bit. Clearly the market is also overpricing reliability these days. It's always been rightfully valued high, but this is getting ridiculous.


Examples would you take these:
1) A fully loaded tech package 2010 Acura TSX with 45k miles for $17k?
2) Or how about 2005 Lexus Rx 330 with 45k miles for $19k?
3) Or how about a fully loaded 2006 Cadillac SRX with 55k miles for $16k?
4) Or how about a 2006 Cadillac CTS with 25k miles for $16k?

All of those are about $35-40k new.


Pull up craigslist type in typical price range and then systematically insert good manufacturers into the search bar. You'll still find good deals it's just that the lower supply on the market means that you can no longer be as demanding of a specific car if you want a steal.

$40k for a car isn't exactly extravagant.

otaymiester said:   $40k for a car isn't exactly extravagant.
Depends on who you ask. I just dropped $17k on a new car and I thought that was wildly extravagant.

Right, it depends on who you ask.

I am shopping for a car now that will likely end up being $85k when all is said and done - some will find this to be an outrageous amount to pay for a car, while some will laugh at this amount as being nothing worth mentioning. People have different wants and needs. There is no one-size-fits-all answer. Financial decisions are always made in the context of what a person wants or prefers. We do this for food, for cellphones, for clothing, for homes, and also for cars.

To answer the OP, most often, leases makes sense if the equivalent interest rate on the lease is competitive, and the residual is at or better than the expected value of the car at the end of the ease, and you plan to change cars every 2-3 years.

Buying the car makes more sense if you plan to own the car for a while and there is no better lease deal - which is typically the case.

Look at it this way,

Lease a 2013 BMW 328i
• $349 First months payment
• $2,750 Down payment
• $0 Security Deposit
• $725 Acquisition fee
• $3,824 Cash due at signing

$12564 Lease payments over 3 years, Insurance over 3 years (Average about $4500)

So after 3 years, you've dumped some $22,000 into this BMW, obviously you can purchase the car for about 25000 at lease end.

I think the question is not about lease vs buy, it's more of how much $ can I afford to burn. If you are making about $200,000 in the Bay Area, go for it.

My $.02 of looking at reliable "premium" 3rd row SUV/CUVs in the north east is that many could have been bought new by a savvy negotiator for not much more than they sell for 2-3 years later if the mileage is kept in check. 2011+ MDX with proper mileage is a good example. A 2011+ 3rd row X5 or GL450 will drop more but who wants to own those out of the covered maintenance/warranty window?

If you are considering a new car, which ever option has the lower cost of capital.

dshibb said:   This took me all of 20 minutes.

Honda Pilot: 2005 54k miles $13k, 2012 8k miles $27k, 2008 60k miles $19k (the last isn't that great of a deal)

Toyota Highlander: 2004 75k miles $10k, 2012 24k miles $24000, 2006 $14k 65k miles (Does this compare to me picking up a 2004 3 years with 33k miles for about ~$13k? No not at all, but that was a sick deal then. Today it looks like patience could yield you an 06 30k miles for probably about ~$19k)

Mazda CX-9: Low supply in the area a couple about where you see and one 45k miles for $20k

Clearly dealerships are getting more brazen in insane pricing, but deals can still be found. They're not as good as they used to be, but that doesn't mean even throwing away $5k on $30-35k new pricing right out of the gate. Also, you just have to open up your search scope a bit. Clearly the market is also overpricing reliability these days. It's always been rightfully valued high, but this is getting ridiculous.


Examples would you take these:
1) A fully loaded tech package 2010 Acura TSX with 45k miles for $17k?
2) Or how about 2005 Lexus Rx 330 with 45k miles for $19k?
3) Or how about a fully loaded 2006 Cadillac SRX with 55k miles for $16k?
4) Or how about a 2006 Cadillac CTS with 25k miles for $16k?

All of those are about $35-40k new.


Pull up craigslist type in typical price range and then systematically insert good manufacturers into the search bar. You'll still find good deals it's just that the lower supply on the market means that you can no longer be as demanding of a specific car if you want a steal.

  

Doesn't this prove used cars are overpriced?  You have to buy a unit 8-9 model years old to get a decent used car discount.  

Hypersion said:   
dshibb said:   This took me all of 20 minutes.

Honda Pilot: 2005 54k miles $13k, 2012 8k miles $27k, 2008 60k miles $19k (the last isn't that great of a deal)

Toyota Highlander: 2004 75k miles $10k, 2012 24k miles $24000, 2006 $14k 65k miles (Does this compare to me picking up a 2004 3 years with 33k miles for about ~$13k? No not at all, but that was a sick deal then. Today it looks like patience could yield you an 06 30k miles for probably about ~$19k)

Mazda CX-9: Low supply in the area a couple about where you see and one 45k miles for $20k

Clearly dealerships are getting more brazen in insane pricing, but deals can still be found. They're not as good as they used to be, but that doesn't mean even throwing away $5k on $30-35k new pricing right out of the gate. Also, you just have to open up your search scope a bit. Clearly the market is also overpricing reliability these days. It's always been rightfully valued high, but this is getting ridiculous.


Examples would you take these:
1) A fully loaded tech package 2010 Acura TSX with 45k miles for $17k?
2) Or how about 2005 Lexus Rx 330 with 45k miles for $19k?
3) Or how about a fully loaded 2006 Cadillac SRX with 55k miles for $16k?
4) Or how about a 2006 Cadillac CTS with 25k miles for $16k?

All of those are about $35-40k new.


Pull up craigslist type in typical price range and then systematically insert good manufacturers into the search bar. You'll still find good deals it's just that the lower supply on the market means that you can no longer be as demanding of a specific car if you want a steal.

  

Doesn't this prove used cars are overpriced?  You have to buy a unit 8-9 model years old to get a decent used car discount.  

  exactly!

dshibb would be correct if it were still 2010 when the market extremely favored used car buyers

@OP you cannot begin to have this conversation until you decide on a few make and models to consider. Go out and test drive to find out what you like. Don't buy a car just because it's a good deal - you will wind up with a car that you don't like 3 or 4 years down the road

otaymiester said:   $40k for a car isn't exactly extravagant.
  What?!  $40K for a car is crazy, stupid extravagant.  forty.thousand.dollars?  For a car?  For a tool that gets you from point A to point B in reasonable comfort and safety?

That's dumb.

I used to think that buying used was the best way to save money on a car however recently I have crunched a lot of numbers and it seems like leasing a new car is about the same cost of buying a used one. (As a side note, buying a brand new vehicle will obviously cost you the most during the first year, and even if you buy for invoice you will lose thousands)...

For example I am looking to buy my wife a newer Toyota Sienna. Brand-new they are $28,000-$33,000 on average for the LE model. After searching for prices and haggling for the past month the best I can get a three-year-old sienna (current body style, 50k miles, great condition) is 18,700. Factor in tax title and fees it's about $20,000 and if I want to finance about half the price it's $21,000
(Financing is $280x48months or $220x60 with $8k down)

Now on to lease deals for new 2013 or 2014 the best deals in my area are zero money down $319 per month or $3000 down $188 a month.
So I would be looking at paying about 11,000 to 12,000 over the course of three years, and having nothing at the end but could lease new again vs having a used van worth less than half the value after five years.

Year 3 I give back the 2014 sienna, put down another 5000 on a 2016 or brand-new car, and by year five it would be just slightly more expensive to lease new. Auto Insurance would be slightly more $, as would "excise" tax that we have in MA.

With that said I think the key is: are you able to drive within the mileage given? Lastly I think another key factor is repairs. All repairs are free with a lease, and maintenance is often free as well.

I hope this helps and I hope I do not ramble on too long...

RobInBoston said:   I used to think that buying used was the best way to save money on a car however recently I have l crunched a lot of numbers and it seems like leasing a new car is about the same cost of buying a used one.

For example I am looking to buy my wife a newer Toyota Sienna. Brand-new they are $28,000-$33,000 on average for the LE model. After searching for prices and haggling for the past month the best I can get a three-year-old sienna (current body style, 50k miles, great condition) is 18,700. Factor in tax title and fees it's about $20,000 and if I want to finance about half the price it's $21,000
(Financing is $280x48months or $220x60 with $8k down)

Now on to lease deals for new 2013 or 2014 the best deals in my area are zero money down $319 per month or $3000 down $188 a month.
So I would be looking at paying about 11,000 to 12,000 over the course of three years, and having nothing at the end but could lease new again vs having a used van worth less than half the value after five years.

Year 3 I give back the 2014 sienna, put down another 5000 on a 2016 or brand-new car, and by year five it would be just slightly more expensive to lease new. Auto Insurance would be slightly more $, as would "excise" tax that we have in MA.

Call that said I think the key is: are you able to drive within the mileage given? Lastly I think another key factor is repairs. All repairs are free with a lease, and maintenance is often free as well.

I hope this helps and I hope I do not ramble on too long...

  
Are repairs free for a lease? I thought it varies from manufacturer? 

OP should lease a Tesla Model S

skadoo323 said:   RobInBoston said:   I used to think that buying used was the best way to save money on a car however recently I have l crunched a lot of numbers and it seems like leasing a new car is about the same cost of buying a used one.

For example I am looking to buy my wife a newer Toyota Sienna. Brand-new they are $28,000-$33,000 on average for the LE model. After searching for prices and haggling for the past month the best I can get a three-year-old sienna (current body style, 50k miles, great condition) is 18,700. Factor in tax title and fees it's about $20,000 and if I want to finance about half the price it's $21,000
(Financing is $280x48months or $220x60 with $8k down)

Now on to lease deals for new 2013 or 2014 the best deals in my area are zero money down $319 per month or $3000 down $188 a month.
So I would be looking at paying about 11,000 to 12,000 over the course of three years, and having nothing at the end but could lease new again vs having a used van worth less than half the value after five years.

Year 3 I give back the 2014 sienna, put down another 5000 on a 2016 or brand-new car, and by year five it would be just slightly more expensive to lease new. Auto Insurance would be slightly more $, as would "excise" tax that we have in MA.

Call that said I think the key is: are you able to drive within the mileage given? Lastly I think another key factor is repairs. All repairs are free with a lease, and maintenance is often free as well.

I hope this helps and I hope I do not ramble on too long...

  
Are repairs free for a lease? I thought it varies from manufacturer? 



You could be right. I'm currently leasing a Chevy Volt and all repairs are free but that doesn't mean they are all free.
I also forgot to mention another factor in that is how long are you willing to keep the car. If you are going to keep it for 5+ years and are concerned primarily about $$, it is better to buy used.
Hmm, perhaps even in the short run, used could be better
A 2011 Sienna is $18k, in 3 years it will be around $12k. Compare that to $11k for leasing, not to mention sales tax will be $500+ more...
Contradicting myself now... Lol

RobInBoston said:   I used to think that buying used was the best way to save money on a car however recently I have crunched a lot of numbers and it seems like leasing a new car is about the same cost of buying a used one. (As a side note, buying a brand new vehicle will obviously cost you the most during the first year, and even if you buy for invoice you will lose thousands)...

For example I am looking to buy my wife a newer Toyota Sienna. Brand-new they are $28,000-$33,000 on average for the LE model. After searching for prices and haggling for the past month the best I can get a three-year-old sienna (current body style, 50k miles, great condition) is 18,700. Factor in tax title and fees it's about $20,000 and if I want to finance about half the price it's $21,000
(Financing is $280x48months or $220x60 with $8k down)

Now on to lease deals for new 2013 or 2014 the best deals in my area are zero money down $319 per month or $3000 down $188 a month.
So I would be looking at paying about 11,000 to 12,000 over the course of three years, and having nothing at the end but could lease new again vs having a used van worth less than half the value after five years.

Year 3 I give back the 2014 sienna, put down another 5000 on a 2016 or brand-new car, and by year five it would be just slightly more expensive to lease new. Auto Insurance would be slightly more $, as would "excise" tax that we have in MA.

With that said I think the key is: are you able to drive within the mileage given? Lastly I think another key factor is repairs. All repairs are free with a lease, and maintenance is often free as well.

I hope this helps and I hope I do not ramble on too long...

  
I've considered your math before (I think I even had a thread about it here) but you seem to be missing a couple calculations, on the Sienna, you say it'll depreciate 50%, but at that point you have a vehicle worth almost $10k.  I'm assuming you're looking at 36 month leases and so the total cost of the leased sienna at 36 months is is around $11,500 @ $319*36 months.  If you buy a used Sienna for $18,700 (I'm ignoring TT&L because I assume it'll be similar regardless of whether you buy or lease in your state, ymmv) then it's worth $9,350 (using your 50% depreciation rate) after the same 36 month term, you would have saved a little over two grand by buying used and selling in three years.  Of course if you have some major maintenance issues, that screws you on the used vehicle, but you can also drive it to the moon if you want and not have to worry about mileage overages.

What you're depending on is that you have ~$2k worth of expenses to make the lease and used van similar AND that you'll be able to secure a similar or better deal in 3 years.  Considering we're at historical lows for interest rates and used car residuals are quite high, I'm not sure that's a safe bet.

Do any of these leases include an option to buy at a predetermined price at the end of the lease?

ankitgu said:   Do any of these leases include an option to buy at a predetermined price at the end of the lease?
  Most (if not all) do.

DaGimp said:   Look at it this way,

Lease a 2013 BMW 328i
• $349 First months payment
• $2,750 Down payment
• $0 Security Deposit
• $725 Acquisition fee
• $3,824 Cash due at signing

$12564 Lease payments over 3 years, Insurance over 3 years (Average about $4500)

So after 3 years, you've dumped some $22,000 into this BMW, obviously you can purchase the car for about 25000 at lease end.

I think the question is not about lease vs buy, it's more of how much $ can I afford to burn. If you are making about $200,000 in the Bay Area, go for it.

While I do generally agree that leasing can be a rather expensive proposition (and have never leased a car in my life), there can be some rather reasonable deals out there. For instance, here's a link to an old thread regarding a 2011 328i for $399/mo plus tax (with Premium Package, automatic, Value Package) and no money down. That's with 12K miles a year, so it's not a low mileage teaser lease. It's also for a nicely loaded car, so it's not a stripped down model.

Also remember that all BMW's automatically include ALL scheduled maintenance in the price (wipers, brakes, oil changes, coolant flush, etc... -- it really does cover all scheduled maintenance), so you have to factor that into the calculations.

If you'd like to see more, here's a 2010 G37 lease from $261/mo for 3 year/36K miles with zero down plus TTL.

Personally, I still find it far more financially advantageous to purchase slightly used luxury/near-luxury cars, which all tend to have a very steep depreciation curve precisely because a lot of people out there have heard all the often repeated tales about their expensive maintenance, so they fail to run the numbers for themselves and end up paying the same or even more for their non-luxury counterparts. Having said that, if you want a brand new car, the above deals are not bad. 

alamo11 said:   OP should lease a Tesla Model S
  I thought Tesla's proposition is actually a purchase with a guarantee that Elon will back up any significant loss of value after a certain number of years out of his own pocket.  [Easy to agree to that now as the stock is flying high, but if the stock tanks and he goes under, there wont be much left to recoup or it will take a long time to recoup]

RobInBoston said:   I also forgot to mention another factor in that is how long are you willing to keep the car. If you are going to keep it for 5+ years and are concerned primarily about $$, it is better to buy used.
Hmm, perhaps even in the short run, used could be better
A 2011 Sienna is $18k, in 3 years it will be around $12k. Compare that to $11k for leasing, not to mention sales tax will be $500+ more...
Contradicting myself now... Lol
 

  I think that how long you keep the car is probably the #1 factor in determining whether to buy or lease.
If you're only going to keep the car for ~1-3 years, either buy a several-year-old car in the flatter part of the depreciation curve, or lease.
If you're going to keep the car for longer, you shouldn't lease...but given that you're committed to driving an "old" car for years anyway, you might as well get one that is already a few years old and let someone else eat the early depreciation.

Financially, I'm not sure that it ever makes sense to buy a new car in the current interest rate environment.  Obviously there are plenty of emotional or personal reasons.

cheapdad00 said:   
alamo11 said:   OP should lease a Tesla Model S
  I thought Tesla's proposition is actually a purchase with a guarantee that Elon will back up any significant loss of value after a certain number of years out of his own pocket.  [Easy to agree to that now as the stock is flying high, but if the stock tanks and he goes under, there wont be much left to recoup or it will take a long time to recoup]

  It is; It's a purchase for 72 months at 980$/month. That being said after 36-39 months you can return the car and get the same residual value as a comparable Audi, BMW, etc. Mr. Musk personally guarantee the guarantee.

jagec said:   
RobInBoston said:   I also forgot to mention another factor in that is how long are you willing to keep the car. If you are going to keep it for 5+ years and are concerned primarily about $$, it is better to buy used.
Hmm, perhaps even in the short run, used could be better
A 2011 Sienna is $18k, in 3 years it will be around $12k. Compare that to $11k for leasing, not to mention sales tax will be $500+ more...
Contradicting myself now... Lol

  I think that how long you keep the car is probably the #1 factor in determining whether to buy or lease.
If you're only going to keep the car for ~1-3 years, either buy a several-year-old car in the flatter part of the depreciation curve, or lease.
If you're going to keep the car for longer, you shouldn't lease...but given that you're committed to driving an "old" car for years anyway, you might as well get one that is already a few years old and let someone else eat the early depreciation.

Financially, I'm not sure that it ever makes sense to buy a new car in the current interest rate environment.  Obviously there are plenty of emotional or personal reasons.

  I think buying a new car actually does make sense in some cases right now.  Looking at used cars most in the non-luxury range seem to be only $2-5k less than new for cars 1-3 years old with 20-40k on the odometer. IMHO, that's not much of a savings for the mileage, and in almost all cases you do not know how the car was treated -- I have a brother-in-law [non FWF type] who buys a new car every 2 1/2 years and drives them like he's a gangland getaway driver -- they look good when he sells them, but the wear on engine, transmission, suspension, brakes, etc. is far greater than mileage would indicate -- and I've got no way to tell when buying used if I'm buying from someone like him or the little old lady who was meticulous and careful.

Our current car is 12 years old, and we're starting to think about replacing it. I'm planning on holding on to our next car at least as long as we've held on to this one, and the current discount for years/miles isn't that great for used. Financing isn't a big issue on either, as many brands are again offering 0% loans on new, and PenFed has a 1% loan option as well on all cars. 



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