Lease vs. Purchase, Never leased before. HELP

[JDub11]

I guarantee they win wayyyy more then they lose. However this whole situation could end up like the housing market in 08. In that case a lease might be better then a loan, but the guy with the payed off car will be sitting pretty when the market is in the tank everyone is losing their jobs. Selling off stock at cheap prices trying to keep the house and car. ect.......

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[mellophonium]

I have leased my last two vehicles. I have enjoyed the lower monthly payments and both vehicles have been worth more at then end of the lease than what I would purchased them for. With that said, I will be purchasing my next Jeep because Chrysler Capital is an absolute pain in the butt to deal with.

 

[mllcb42]

I guarantee they win wayyyy more then they lose

I 100% agree. That doesn't mean their aren't leases that they don't win on that make way more sense than purchasing though.


The problem with this discussion is it isn't a binary answer. There are some vehicles where leasing is a significantly better financial choice for that vehicle. There are some where leasing is horrible. There are some where leasing is a minor cost penalty that is totally worth paying for the risk reduction. It changes by vehicle, individual situation, where you're located, etc.

 

[TheRaven]

I'm not talking about a 35000 dollar car to a 40000 dollar car. I'm talking about buying a 20000 dollar car instead of a 40000 on 84 payments.

Show me a $20000 new car please. Don't get me wrong, they exist. But they're hilarious.

You just aren't in tune with reality. Example - both the Chevy Equinox and Toyota RAV4 in mid-trim (i.e. conservative builds) are over $35k out the door. Those are mainstream econoboxes. A family of four isn't living with one unless they absolutely HAVE to. And they're going to hate it. They're going to need a highlander or Traverse and those are mid-$40s in conservative trim.

The same logic still applies...if i'm spending $20k that means i'm going to have a car payment, and if i'm going to have to make a monthly car payment then i'm going to drive something i'm happy with. Funny I should have to explain this on a forum dedicated to a completely unnecessary vehicle that only well-off people can afford.

The problem with this discussion is it isn't a binary answer. There are some vehicles where leasing is a significantly better financial choice for that vehicle. There are some where leasing is horrible. There are some where leasing is a minor cost penalty that is totally worth paying for the risk reduction. It changes by vehicle, individual situation, where you're located, etc.

Cannot upvote enough!

 

[JDub11]

I don't think I ever said a new car. What's wrong with a used car? It's called living with in your means. If you can't afford it you can't afford it. Your gonna have to drive a car you don't like. Or improve your financial situation. Or when your 65 don't have a pot to pass in working at McDonald's just trying to get by don't expect handouts and people to feel sorry for you. This isn't directed at anyone here just the point of my entire rant to begin with. If you are financially independent and can truly afford a 60000 thousand dollar car by all means lease it, rent it, finance it, pay cash. There is nothing financialy smart about owning this vehicle. If you have sacrificed and worked your ass off you deserve to treat yourself. That is what a 60000 dollar vehicle is for. If your leasing or financing a vehicle at extremely long loan terms just to be able to afford the payments you are doing it wrong.

 

[TheRaven]

I don't think I ever said a new car. What's wrong with a used car? It's called living with in your means. If you can't afford it you can't afford it. Your gonna have to drive a car you don't like. Or improve your financial situation. Or when your 65 don't have a pot to pass in working at McDonald's just trying to get by don't expect handouts and people to feel sorry for you. This isn't directed at anyone here just the point of my entire rant to begin with. If you are financially independent and can truly afford a 60000 thousand dollar car by all means lease it, rent it, finance it, pay cash. There is nothing financialy smart about owning this vehicle. If you have sacrificed and worked your ass off you deserve to treat yourself. That is what a 60000 dollar vehicle is for. If your leasing or financing a vehicle at extremely long loan terms just to be able to afford the payments you are doing it wrong.

Big problem with this idea - if everyone who, by your metric, cannot afford a new car instead buys used cars, the supply of used cars will very quickly shrink to the point where there isn't remotely enough...kinda like right now...and you can see what happens in that scenario. I ended up with a brand new 2020 Challenger after going in looking for used cars because it was quite literally cheaper to buy a new one. For there to be great deals on used cars there has to be an oversupply, and that means that there has to be a large chunk of the population buying new cars.

 

[CharlesC]

Ok…. I’m sorry, I’m not wanting to upset or offend anyone with this post, but this needs to be said…. Reading some of this advise, I’m at a total loss. Let me be clear. Leasing is NEVER a good option…. Not if you value your money, anyways. I just don’t understand…. At all.

With leasing, you pay, you pay, you pay, and you PAY…. Then you give the Jeep back. You don’t own anything! Where did your money go?? What do you have for that spend?

When you buy, you pay, you pay, you pay, you pay, and then the payments STOP. You still have a Jeep, and YOU OWN IT.

Now, in this case, court.brink only has 10K in equity in her current Jeep. court.brink, by your numbers, right now you are $19k in the HOLE. Do you really want to put yourself deeper in debt? What happens if for whatever reason, you can’t make your payment?

I don’t really want to go all Dave Ramsey on anyone (I don’t care for the guy…), but leasing is just stupid. Burying yourself in too much debt is stupid. court.brink, If I were you, I would keep what I had, pay it way down, until I was in a better equity position, THEN make my move.

As far as prices are concerned, the reason prices keep going up is because manufacturers (all of them, not just Jeep) have been cutting their lower priced options, and only want to sell us their more expensive options. Go to a Ford or Chevy dealer, and look for a brand new cheaper car (not the more expensive crossover version…). Tell me what you find. We’ll wait….

Anyways, I’ll get off my soapbox now!

 

[JDub11]

Unfortunately I don't set the metrics for what people can afford. That is saved for reality. You said yourself there are 20000 dollar new cars. Just because you don't want to drive them dosent mean they don't exist. If more people bought these cars then thats what the manufacturers would produce. People are buying expensive suvs they can't afford. That is why they build them. There is a demand. All I keep hearing is trying to justify people buying cars they cannot afford.

 

[kj11]

Ok…. I’m sorry, I’m not wanting to upset or offend anyone with this post, but this needs to be said…. Reading some of this advise, I’m at a total loss. Let me be clear. Leasing is NEVER a good option…. Not if you value your money, anyways. I just don’t understand…. At all.

With leasing, you pay, you pay, you pay, and you PAY…. Then you give the Jeep back. You don’t own anything! Where did your money go?? What do you have for that spend?

When you buy, you pay, you pay, you pay, you pay, and then the payments STOP. You still have a Jeep, and YOU OWN IT.

Now, in this case, court.brink only has 10K in equity in her current Jeep. court.brink, by your numbers, right now you are $19k in the HOLE. Do you really want to put yourself deeper in debt? What happens if for whatever reason, you can’t make your payment?

I don’t really want to go all Dave Ramsey on anyone (I don’t care for the guy…), but leasing is just stupid. Burying yourself in too much debt is stupid. court.brink, If I were you, I would keep what I had, pay it way down, until I was in a better equity position, THEN make my move.

As far as prices are concerned, the reason prices keep going up is because manufacturers (all of them, not just Jeep) have been cutting their lower priced options, and only want to sell us their more expensive options. Go to a Ford or Chevy dealer, and look for a brand new cheaper car (not the more expensive crossover version…). Tell me what you find. We’ll wait….

Anyways, I’ll get off my soapbox now!

But you don't have to give the Jeep back... You can buy it at the end of your lease term for likely less than you'd pay for another 3 year old Wrangler on a dealer lot somewhere. There are options at the end of a lease, just like there's options to buy or lease. Blanket statements like 'leasing is NEVER a good option' are simply not true for everyone.

If you're going to buy a depreciating asset you should do so in cash, otherwise you are paying money (interest) to sink money into something that will never be worth as much as you paid for it. It's the same reason you don't use a credit card to buy a TV.

 

[TheRaven]

Ok…. I’m sorry, I’m not wanting to upset or offend anyone with this post, but this needs to be said…. Reading some of this advise, I’m at a total loss. Let me be clear. Leasing is NEVER a good option…. Not if you value your money, anyways. I just don’t understand…. At all.

With leasing, you pay, you pay, you pay, and you PAY…. Then you give the Jeep back. You don’t own anything! Where did your money go?? What do you have for that spend?

When you buy, you pay, you pay, you pay, you pay, and then the payments STOP. You still have a Jeep, and YOU OWN IT.

Haven't you read ANYTHING we've been talking about up to this point?! This stuff has been covered, and you're working with old data. It's just not true anymore. Fact - leasing is sometimes the BETTER option "if you value your money". I've already given multiple examples.

As far as prices are concerned, the reason prices keep going up is because manufacturers (all of them, not just Jeep) have been cutting their lower priced options, and only want to sell us their more expensive options. Go to a Ford or Chevy dealer, and look for a brand new cheaper car (not the more expensive crossover version…). Tell me what you find. We’ll wait….

Now this is much better. Manufacturers make higher margin on higher equipped vehicles. So yes there is truth here. You can prove it by pointing out that the advertised "base price" for whatever base model compact CUV you pick is like $26k...but just try to get one out the door for under $35k...it's not possible.

 

[mllcb42]

Let me be clear. Leasing is NEVER a good option…. Not if you value your money, anyways. I just don’t understand…. At all.

That's great that you feel that way, however, it is an incorrect statement. There are plenty of times when leasing the vehicle results in a lower net cost to use the vehicle.

There are also times when it costs significantly more to lease the vehicle than purchase it.

Hell, there are times when the most cost advantageous strategy is to lease the vehicle and then immediately buy the lease out the next day.

Situations vary and anyone who says there is a black and white answer to this question is wrong.

 

[CharlesC]

BTW... I AGREE that leasing can be LESS costly, aka, a cheaper option...

But that only applies on a SHORT-TERM BASIS. When we are talking about maybe a 2-3 year time period, leasing will always be cheaper than buying. But see... that's why your sales guy always wants to push a lease onto you. They only look at the short term, and only on your monthly payments. They make WAY more money selling you a lease, than selling the vehicle to you., because they keep the "asset" (I say "asset" in quotes because I believe that an asset is something that puts money into your pocket...). They will turn around and sell it again, and make more money off of it. It's an asset for the dealer, and possibly the bank, but a liability to you.

Now, stretch that time period out to 5-6 years. 10 years. The car in my garage right now is a perfect example.

I bought that car at the end of 2004. 4 year loan. Paid it off early. Haven't put another dime into payments since. Just consumables (tires/brakes/oil), and maybe 2k in repairs, and I'm STILL driving that car. Works perfectly. 17 YEARS. Because of that I have saved up enough to purchase the Jeep I ordered... currently in D status)

If I was leasing for 17 years straight????

I say again, Leasing is stupid.

 

[mllcb42]

BTW... I AGREE that leasing can be LESS costly, aka, a cheaper option

There are plenty of cases where leasing results in a cheaper net cost, not just monthly cost.

There are also significantly more cases where that isn't the case.

There are cases where, even if you plan to keep the vehicle for 17 years, it is cheaper to lease first and then buy it out at lease end.

You have an oversimplified understanding of leasing and are missing the opportunities to use it to your advantage.

 

[sixspeed]

I just picked up my Rubi 4xe. Leased for a few reasons, mainly because I'm worried about Jeep hybrid reliability. But the Jeep price was near 10% under MSRP, and the $7500 tax rebate was applied to the capitalized cost. Different terms, but my lease payment is similar to yours with $0 down on a $61k vehicle. The 4xe lease deals are great right now. With a lease, I'm kicking the can down the road 3 years, so there's definitely risk involved. Odds are decent that my Jeep will be worth more than the residual, but that really depends on when Jeep comes out with the EV-only version.

Edit to add... and with a similar lease deal with 0 down, you can pocket your current equity.

I wouldn’t buy a 4xe. The expensive batteries will need to be replaced at some point which very likely won‘t be during the lease term.

 

[Veets]

I leased mine and thank god I did. I leased my 2020 JL with the diesel pretty much loaded except no leather. The paint is now bubbling the jeep is doing the death wobble happens quite often now and I notified the dealership. So far they did nothing about the front end and I’m bringing it in for the paint Friday. Few more months good bye POS someone else problem. And if you get a good one you’ll have the option to buy it, it may cost a little more but well worth imo.

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