I am 68 years old and have a 2004 Hyundia Santa Fe with 185,000+ miles on it. I am ready to get something newer. I have kept the maintenance up on the car and love it but I know I am going to have to start spending some money on it soon. I am thinking on Leasing because I drive so few miles in a year now. If I am inclined to take a "road trip", I would rent a car and let them put the mileage on it. What are your feelings on buying vs leasing a vehicle?
I have had a few new cars but I don't think I'll buy another one unless I win the lottery or something. If I had money to spend, I think I'd buy a used one and invest in bringing it up to speed rather than buying a new one at this point in my life. Right now, I am driving a 2002 Chev. Tracker and I wouldn't be afraid to take it across the country if I needed to. As for leasing, the only time I drove a leased car was when I worked for a state college and a leased car came with the package since my program spread over two campuses. But I wasn't paying for that, so that doesn't help me figure out whether it's a practical idea. As I understand it, a leased car is like making payments, except that you never get it paid up. On the positive side, you can trade it in for new models. So I suppose that if driving a new or newer and dependable car is worth having a monthly or annual payment that will never go away, then that might make sense. Depending on how much of it you have to finance, if you are buying a new car, you might be ready for a new one by the time you get it paid for. If that's the case, then leasing might be the way to go. That's how I understand it, anyhow. I prefer having a car that runs well and is paid for, and I don't so much care what it looks like.
I agree with Ken, I would rather have a vehicle that runs well and is paid for, and that is much more important than the appearance. Unless you just want to make payments and have a newer vehicle, why not just keep the one you have, @Pam Sellers ? It is still under 200k, and if you don’t drive very far, then you can go a long time before you reach that 200k mark, and the Hyundai is supposed to be one of the more dependable vehicles, from what I have read. As you mentioned, you can always rent a vehicle if you are going to go on a trip where you will be a long ways from home and need to be sure you are driving something that should not break down in some strange place. The money you would spend on car payments and extra insurance would help cover any repairs you do have to make on the Hyundai, if it did need some maintainence.
@Pam Sellers Welcome to the forum! I liked your question here because I know so little about leasing a vehicle but regard the idea as a means of renting a new car which one can keep at the end of the lease, but that requires payment then for it, I think. Hoping some others will explain the pros and cons, as I would like to know. I think if I ever were able to buy a new car, only way I would (or could!) do it would be by a 0% loan. They do that supposedly for certain buyers, but I've never known anyone who bought that way. Frank
We have a 2005 Durango SLT with 153,000 miles on it and, like our 1992 powerboat, we have put money into maintenance and repairs, because we don't want any monthly payment that would come with a newer vehicle. Both run fine, but can never tell when the Engine Light could come on with the Durango or something could happen to the boat. Our finances just don't call for anything new or even used. So, will keep and repair what we have, unless it's a major/big-time repair, then...…….
Welcome @Pam Sellers It might help you to make some basic decisions on buying or leasing as well as on a leasing contract either based on residual value or on mileage (and here again on low mileage or standard mileage). Once you've made those decisions you can inform yourself about the best deals. If you go for residual value, which is often non-negotiable, then comparing that for the same car is a useful strategy. The downside is a) of residual value leasing that the residual value is often artificially inflated to keep monthly payments low. Often it turns out that dealers find reasons for not accepting the once fixed residual value which will force you to pay the difference. b) Going over the fixed mileage will also force you to pay a penalty. Other factors to consider are interest, down payment. You may find this link helpful. https://www.consumerreports.org/buying-a-car/leasing-vs-buying-a-new-car/
Pam, leasing works best for businesses, but not so much for private individuals. If appearance is the most important thing to you, then lease is the way to go, as you can get a new vehicle every few years, but otherwise it is a bad deal. The best cars I have ever bought, and the best deals, were purchasing used rental cars from companies like Avis or Enterprise. The cars might have a little wear and a few dings, but they have ben properly maintained and have a service history. Sometimes you can get similar vehicles from fleet auctions (major companies selling entire fleets in order to replace them) but these are harder to find and many times you are competing with used car dealers for these cars. https://www.enterprisecarsales.com/ https://www.aviscarsales.com/ A friend of mine told me that you always make a car payment, but with the car you have, the payments are two or three times a year, but a new car is twelve times a year (His last car was purchased as a repossession from a bank). If your car is still safe and the powertrain is reliable, I would keep the car you have and spend the money on repairs. If you need a more reliable, luxurious car for long trips, just rent at that time. I prefer the train to a nearby destination and rent from there (fly if you must....).
I suggest keeping the car you have and start making payments to yourself and put it in the bank. If you decide to get a newer model later on you can use the money you put aside to pay for it. My feelings are that money in the bank is more satisfying than a pretty car.
I vote for buying a new car. Your plan for leasing sounds good but you should consider the length of the lease as well based on how much longer you intend to continue driving in the coming years. Also you should think about the cost of insurance for a new vehicle whether buy or lease. Maybe you can get your current vehicle a paint job or install something you would like to have that a new vehicle has.
Someone on these forums once said..the least expensive car you can own is the one in your drive. Buy a 'new car fragrance spray'' and you'll think you're in a new car..my husband uses that in his car, it smells lovely.. On a more serious note, I suggest you just get the few bits needed to bring your car up to scratch, for now...and like others have said, put the money away for a new car when the time comes that you will really need it..
I wish I knew the answer! My brother always buys a late model lease or program car with the balance of the factory warranty because he feels that it is much cheaper to let someone else take the hit for the initial depreciation. He drives them until they are 5 or 6 years old and trades them in before any major repair work is needed. So far this system has worked well for him. I think that I'm inclined to look for a new car lease with ultra low mileage and no money down. It seems more expensive to drive new every two to three years but when I factor in the dividends and capital gains earned on the money that I would have spent to buy a new car it brings the cost of leasing into line. Driving a new car every two or three years will also force me to keep up with all of the new bells and whistles, not a bad thing. Tough decision!