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2012 3.6R Limited Pearl White Satin
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Discussion Starter #1
I am always under impression that is cheaper/more economical to buy a (even new) car, maintain it well so it can be driven for 10-15 years compared to leasing a new car every 3-4 years.
But pretty often in car forums where people said "I traded my 2-3 yr old car with this year model..."
That makes me wonder if leasing could be cheaper than buying? I never really calculate it down to pennies, so maybe there are some factors I have not taken into account yet (let's not take into account the limited mileage that comes with leasing a car. Let is assume mileage is not an issue here)
Maybe high mileage maintenance cost makes owning more expensive (let's for simplicity just assume we pay people to do the maintenance, which what most people do)?
Are there other factors that I do not know that makes leasing cheaper?
Or my understanding is correct (buying is cheaper), and those people simply do not mind to pay extra money to drive a new car every 3-4 years?

Thanks.
 

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13 Outback 2.5i Premium w/AWP 6MT
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Lots of factors.

I leased my first car. It was a 2009 Subaru Legacy 2.5i SE.

My total cost for 3 years of driving it, was 9000 dollars including all tax and fees in the lease.

Sticker price was 24,500. End value of the vehicle was about 14,500 at time of return. I made out on top due to a spectacular lease deal at the end of the model year.



Now to the kicker to answer your question. It is no. Do the math. That's about as much explanation I know how to give. I bought my last 2 cars. Financed at great rates. To me it is in for the long run now.
 

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I am always under impression that is cheaper/more economical to buy a (even new) car, maintain it well so it can be driven for 10-15 years compared to leasing a new car every 3-4 years.
But pretty often in car forums where people said "I traded my 2-3 yr old car with this year model..."
That makes me wonder if leasing could be cheaper than buying? I never really calculate it down to pennies, so maybe there are some factors I have not taken into account yet (let's not take into account the limited mileage that comes with leasing a car. Let is assume mileage is not an issue here)
Maybe high mileage maintenance cost makes owning more expensive (let's for simplicity just assume we pay people to do the maintenance, which what most people do)?
Are there other factors that I do not know that makes leasing cheaper?
Or my understanding is correct (buying is cheaper), and those people simply do not mind to pay extra money to drive a new car every 3-4 years?

Thanks.
Couple of friends are leasing right now.. Why? They are scraping together a huge down payment to purchase a house so they are keeping their cash stash at maximum %. Talking 300+K on 1+ million dollar homes. As soon as their lease is up they will be in a house and will simply buy a car.

It's always cheaper to purchase a car with no interest paid on the money you use. But there are good reasons to lease all having to do with short term need for a vehicle and not wanting to front the cash to purchase one.
 

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Ah, in S.F. that's a 2BR/1BA in the hood.;)
Nope SF our 1450sqft 1920's 2bd, 1 office split 1 bath with full size walk in laundry room in the unit and updated kitchen that is 14x15 yes surprisingly thats the original 1920 kitchen size is valued around mid 800K right now. Market rent is $3000 a month BTW

Our 1959 2500sqft Spannish tile two story gutted in 91 to the studs and rebuilt sitting on just a hair shy of half acre lot backing up to a creek IE no neighbors looking at us is some place in the 1.2 price range today.

We almost stayed in SF given housing was cheaper but we didn't like the thought of paying 32K a year per kid starting at KinderGarden for private school. We have a few friends who stayed with two kids! Duel income professionals making big money over 130K a year spent on taxes and kids schooling nothing else...... We opted for good public schools higher priced house due to that - we can sell the house get our money back when the kids are gone.

Friends paying for private school might need to place a lien on their kids income to recover the private school tuition money ;-)
 

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2013 OB 3.6R Satin White Pearl
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I've leased a couple cars in the past when deals were great, no money down, low interest. If you go over the mileage limit, typically 12K/yr,you pay big bucks in penalties. It was a nice deal when I didn't drive a lot of miles, but needed the security of a new car and warranty. You are always paying insurance rates for new cars that are higher than older cars, so that adds up. It was much cheaper overall when I bought my Camry and drove it 9 years. The best bet is a good, reliable brand over a long period of time.
 

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2013 Legacy Lim CVT Car: 2011 OB Prem 6MT Car: 2006 Miata GT 6MT mc: 2003 Honda GL1800A * Reunite Gondwanaland *
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Any chance leasing is "cheaper" than buying?
1) Yes, there is a chance.

2) It depends on the specific deals you're comparing.

3) Not all "costs" have a tangible cash value. Buying has higher risk.

4) Do the math. Don't overlook your state's buy vs. lease tax situation.

...you pay for what you get,

Looby
 

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2005 3.0 R n totaled
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I have been leasing cars all my life (40 some years) and it works great for me.
Leasing is not for everybody - do your math!

Advantages of leasing:
1. You can write off the lease (or part of it) on your business tax returns. If you don't have a business, start one as "consulting" even if you still work part time or full time.
2. You are not "riding/sitting" on cash; that cash can be invested and get a reasonable profit (if there is such thing).
3. You can always (I could) sell the car at the end of the lease with profit.
4. If you lease, scrutinize the "money factor" which is similar to interest rate although a different formula.
5. You have lower monthly payments.
6. You can get more expensive car that you could normally afford (because of lower monthly payments) - and this is, according to many financial experts, the main reason, (besides the tax write offs) that people lease cars instead of buying them.
 

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2009 2.5i, H4, Auto.
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One more thing to throw in to the comparison is the used car market. Slightly used cars are a LOT cheaper than new. If you find a good deal, you can find a slightly used car for around the same monthly payment as as leasing a new car.

I know a couple people who lease because their business position requires them to have nice cars by leasing they are able to get new cars every other year and keep up the appearance that is required of them.

However if you drive a LOT, the over-mileage fees on a lease can really bit you in the rear.

If you are very good at your financial discipline, you could try something like a friend of mine did. He figured he could afford a $450/month car payment. Going into the dealer, he leased a $27,000 car for about $200/month, and put the extra $250/month into an investment account. After 2 years when his lease expired, he purchased the car for about $15,000. By that time, he had about $7,000 from the money he was putting aside to use as a down payment. So he only had to finance $8,000, and he had that paid off in under 2 years. So in the end he ended up paying just over $20,000 (Including interest) for a $27,000 car that he drove since it was new.

I wish I had that level of discipline.
 

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2005 3.0 R n totaled
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Startiger: That is, what I sometimes do. If I like the car, at the end of the lease I buy it - or, if I find someone, who is willing to pay appx $ 2000 over the end of lease value/payment, I pay off the car, sell the car and pocket $ 2000 (done it several times). Besides fiscal responsibily and financial discipline you need an excellent credit rating.
 

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There are exceptions to every rule but generally it's cheaper to buy. If you're leasing then you're essentially renting the car unless you have an option to buy at which time it's still not cheaper because you have to buy it. If you play with the numbers and work out a good deal you can occasionally work the system and come out better than you would have if you financed it but these are rare occasions.

You've got two basic car owners. Those that buy and keep their vehicles until they can't be driven anymore. They get a good ten years out of a car which, in the grand scheme of things, means it's cheaper than leasing because you're getting about give years of driving with no car payment. The other car owner likes to have a new car and has grown accustomed to having a car payment and doesn't mind having one for the rest of their life. Yes, they tend to have a lower payment and/or nicer car but they never get to reap the benefit of owning their car.

When you factor insurance premiums and registration fees into the equation, leasers are paying even more.
 

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2013 Legacy Lim CVT Car: 2011 OB Prem 6MT Car: 2006 Miata GT 6MT mc: 2003 Honda GL1800A * Reunite Gondwanaland *
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If you're leasing then you're essentially renting the car ...
Same thing for a financed "purchase." It belongs to the bank, not you.
An automobile loan is just a longer-term lease with a $0.00 residual,
and no price-guaranteed mid-flight bailout option.

When you factor insurance premiums and registration fees
into the equation, leasers are paying even more.
That depends on where you live, (among other things).

In PA, with a financed "purchase," you effectively pay interest
on the sales tax, but with a lease, you pay tax on the interest.

...and then you die,

Looby
 

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2019 Forester Sport. Love the Orange.
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Same thing for a financed "purchase." It belongs to the bank, not you.
Looby
Man, I got gypped. I have all the legal and financial responsibility and the bank still owns it? The least they could do is fill up the tank once in a while.
 

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2005 3.0 R n totaled
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There4igraham:

As I posted earlier, my financial advisors as well as CPAs, concluded contrary to your statement that "buying is cheaper" - not just in my particular case but "generally speaking"... it's about the same and, as Looby mentioned, there are many factors that one has to consider. I just go by what I am being advised by qualified professionals who are experienced in this field and forwarding those conclusions to this forum.
 

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I lease deals not cars.
For me, leasing has always been cheaper. That's because;
I'm a low mileage driver, less than 10k per year.
I don't have to have a particular model or grossly overpriced option. ie Nav.
I time my purchases to when manufacturers want to move cars
I'm not blindingly loyal to a particular manufacturer.

For example, we're driving a 2012 Outback 2.5i Premium right now with 0 out of pocket when we acquired the car, 1st payment paid by Subaru and payments tax, 1st years license etc for $301.

Subaru has the Forester currently available for $249 with no money down. If we turn in the Outback, our dispo and acquisition fees will be waived and they'll pay the first months payment.

I call these deals promotional leases and US News and World Reports publishes them monthly on the we. Just Google best lease deals for say July 2015 and you'll find lots of resources.
 
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