That's a good point for leasing, I never looked at it like that! I used to keep my cars for for 4-6 years, always paid them off, but it's been like 14 years since I've paid a vehicle off, so leasing might make sense.

 

I bought an 04 Coupe last year fully loaded (premium,sport,navi) with 29k miles and financed it for a monthly payment of $505. If I lease an 07 fully loaded without money down (except fees) it comes out to about $600-610 a month. If I pay $610 a month towards my car, in 48 months it will be paid off. A 6-year G35C has a residual value of about 33-35% or roughly $14k. So up front a lease and a finance are about the same in cost. The diffrence is you drive a 2 year older car but if you sell it in 4 years after it's paid off and factor in the 14k back. It comes up to $320 a month to drive a fully loaded vehicle vs $610 for a lease. The likelyhood of having problems with it are very small. It's still a reliable car if you have around 70k at 6 years.
So it's a decision everyone makes for himself. Do you want to drive a brand new at a primium or could you live with the fact that it's a couple of years old but you end up paying about half to drive the same type of car.

 

That Edmunds calculator doesn't seem to take into account the lost interest from using your money to buy a car. I've done a spreadsheet to analyze a 3-year lease, and financially it makes sense to lease rather than buy in most cases. If you keep your car for longer periods of time then it will be cheaper to buy. If you like a new car every few years, then keep your money in the bank and lease the car.

Life's too short and I like driving the latest cars. I never leased before and ended up having to sell my car 3 years later. Between the depreciation and the lost interest my money could have been making me, I should have leased. $40,000 can make you $2k a year before tax. 3 years - that's 6k ($4k after tax). That's worth over $100 per month right there.

 

Apple to orange...How can you campare an 2 year car to brand new ones...and than draw the conclusion that leasing dont make sense... The price between two cars are about 10~15k to start out with.

Its not fair to say that leasing makes less sense, by the same comparsion, it will have same type of difference, if one would to purchase an brand new one and two year old car...

 

That is not really the best way to look at it if you put money down on the car. If you total a leased car, sell a leased car, or have a leased car stolen and not recovered then you have just lost your down payment. The gap insurance pays off the lease but they don’t give you your down payment back.

 

You have to read my post more carefully. I didn’t say that leasing doesn’t make sense. If you insist that you have to have it brad new and you are planning to drive it for 2-3 years, then it makes perfect sense. That of course comes at a premium because the steepest depreciation is in those first 2 years. I gave a viable alternative if one is willing to sacrifice 10-15% of the car’s useful life for a 45-50% reduction in cost. I would consider it an apple to orange comparison if I were comparing a G35C to IS350 for example. The differences from an 04 to 06 G35C are very minor and for some people certainly not enough to justify the difference in cost. When your apple G becomes 2 years old, does it turn into an orange or a Lexus? Mine didn’t. It just showed 29k miles on the odometer, but it still feels and rides like yours for half the price. I am willing to live with the 29k miles and 2 year difference for half the price. If you aren’t, then you’ve made the right choice for yourself.

 

Excellent question and one that I have thought about every time I have bought a car. Several years ago I talked this over with a car broker/consultant. Once he found I that I tend to keep cars 4 years or more, he said I should buy. The last several cars my wife and I have owned have been kept for several years (1979 Supra for about 7 years, 1986 BMW for 9 years, 1990 Maxima for 10 years, 1995 Corvette that I still own, 2002 Acura TL that we still own). We generally put a decent amount of money down and pay off in 4 years or less. It is nice owning a car outright and having a few years of NO payments in between.

I'm sure that there are all kinds of fancy economic analysis someone could do to show that I am an idiot for doing it this way but, hey, it works for us.

The common factors I see for those who choose leasing are inability or no desire to put much down, like changing cars every couple of years, ability to get more car with little down versus buying.

Doug

 

Well, this thread is about "leasing vs owning" and not about "new vs used"