Cars / Buying or leasing. How does this work when considering a car?
Jan 11, 2023
Buying or leasing. How does this work when considering a car?
I know how to get my 401k all in order but don't know where to start really when it comes to a car. Haven't had to get one until now because I have to commute to work as my only option. I've heard that leasing is better if I plan to keep a car around for only a few years which is probably the case for me. It will come down to the math as I'm on the more frugal side. Any words of wisdom as I do some research on my own appreciated. Thanks all!
Replies (5)
Jan 11, 2023
@GerryWAK, Comes down to how long you plan to keep it, how important the car make and condition is to you, how much you plan to drive it and all the associated cost differences between the two options. If it comes down to the math, have you checked out online calcs? Edmunds and other car sites have them. Here's Edmunds - https://www.edmunds.com/calculators/lease-vs-buy-calculator/
You may find this lesson relevant and helpful.
Click on it below and a new tab will open and take you directly to the lesson.
Buy vs Lease a Car?
Cars
6 min
Jan 11, 2023
@Stewart879, yes that was exactly what I was looking for online and there are so many calcs. This lesson is really helpful btw.
Jan 11, 2023
@GerryWAK, Be careful with leasing because on the surface it looks more appealing because your monthly payments will be lower than if you were financing a purchase. That is because you are not paying back any principal so you are not building equity at all and basically paying for depreciation. If you are leasing a new car, that's the worst because it's depreciating faster. As they say the moment you drive the car off the lot it's worth like 20% less. You will also want to really nail down how much you plan to drive the car because there are limits with leasing at around 10,000-15,000 miles a year. On ongoing personal car needs (after the lease term) is an aspect you want to nail down too (do you need the car past the lease term and would you want to buy it).
Jan 12, 2023
@CortneyLX8, great advice, thanks for them.