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is it better to buy or lease a car?

Discussion in 'BlackHat Lounge' started by firstnamelastname, Jun 27, 2017.

  1. firstnamelastname

    firstnamelastname Junior Member

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    is it better to buy a car or lease it?

    if the answer is "it depends" it depends on what?

    if the location matters, I am in the US
     
  2. mickyfu

    mickyfu Jr. VIP Jr. VIP

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    The benefits are if you buy the car it is your car, you get the feeling that it is your car. Other than that, you are probably better off leasing the car.
     
  3. firstnamelastname

    firstnamelastname Junior Member

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    The problem with leasing is that the car is not yours, you are basically throwing your money in the trash?
    and if the car gets a scratch, they will charge you a fortune.
    but some people in real life are telling me economically speaking, it's better to lease. I don't get why.
     
  4. Figrole

    Figrole Regular Member

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    I think it depends how you look at it / what you do with your money on a monthly basis.


    Example A:
    You have you income monthly, set bills, set routine, set everything. Then yeah its better to buy it.

    Just because its there, you know itll always be there and you have something to save towards.


    Example B:
    Lets say you do IM.

    Off the top of your head, would it make more sense to buy a CAR (arguably the worst investments ever) for 50k or so outight, or to pay 500 ish bucks a month to lease it?
    ------> THAT WILL MEAN YOU HAVE 49.95k LEFT TO PLAY AROUND WITH.



    Personally I think leasing makes more sense. Yes, it is for nothing effectively as you never own the car.

    But on the flip side why would you want to own seomthing that will lose you money in the long run?
     
  5. mickyfu

    mickyfu Jr. VIP Jr. VIP

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    There are terms and conditions on scratches and shit, but on the bright side you are not responsible for break downs and shit, you get a brand new car every 3 / 4 / 5 years or so. Buy a new car and it is worth jack shit compared to what you paid for it 5 years down the line. You can end up paying your cars worth in repairs (especially buying second hand 5 year old car) within months.
     
  6. Sherbert Hoover

    Sherbert Hoover Jr. Executive VIP Jr. VIP

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    Benefits of Leasing a Car

    Leasing a car is similar to financing in many ways, but there are some key differences. When you are purchasing a car, the loan value is based on the entire cost of the vehicle, minus your down payment and trade-in value. When leasing, however, you’re only financing the depreciation that occurs during the lease term (most commonly three years), plus fees. At the end of the lease term, you simply return the car to the dealership.

    So, unless you pay a tremendous amount of money down, or your trade-in had a high value, a monthly lease payment will be lower than a monthly loan payment. With the car lease, you only pay the difference between the car’s price and what it’s expected to be worth at the end of the lease, which is known as its residual value.

    It’s helpful to look at some numbers. Say your dream car is a new SUV that costs $30,000, you’re able to put 10 percent down ($3,000), and don’t have a trade-in. You’ll need to finance $27,000.

    With any lease, there will be a predetermined residual value. Let’s say, for our example, that it’s 55 percent, or $16,500. That means you’ll only make payments on the $13,500 worth of use that you’re expected to get from the vehicle. That’s half the price of the outright purchase. It’s not quite that simple – both types of deals generally come with fees that need to be included in the math – but that gives you an idea of why lease payments are generally lower than financing payments.

    If you only have a small down payment saved up, leasing may be a good option. Car leases require anywhere from zero to several thousand dollars up front. Many of the best new car deals are advertised lease offers that promise low monthly payments, although some require high down payments. Just like with an outright purchase, the more money you put down, the lower the monthly payment.

    Leases are a good way to have a predictable total cost of ownership. Many leases last about three years, or the length of a typical new-car bumper-to-bumper warranty. That means the car is usually covered under warranty for unexpected repairs during the lease. You’ll still need to maintain the car, though, which includes oil changes, tire rotations and recommended maintenance from the manufacturer. Maintenance is even more important for a leased car than a purchased one, as failure to properly maintain and document service for the car during the lease can result in fees at its termination.

    If you enjoy having the newest high-tech and safety features, leasing could also be the better choice for you. With leasing, you can get a new car every few years, and each one will have the latest and greatest technology and safety features. With a leased car, you don’t have to worry about selling the car or getting a good price for your trade-in. When the lease is up and you have followed all the rules about mileage and maintenance, you can simply turn in the car and walk away.

    Drawbacks of Leasing a Car

    Lease contracts strictly limit the number of miles you can drive before steep penalties are imposed. The mileage restrictions typically range from 9,000 to 15,000 miles a year, with 12,000 being the most common. You’ll need to estimate how many miles you drive per year and round up to the next mileage limit available on the lease. If you exceed the limit, prepare to pay a fee per mile at the end of the lease.

    Mileage overage fees can add up quickly. For example, if your lease contract imposes a 20-cent-per-mile fee for miles over maximum, you’ll have to pay $1 for that 5-mile round-trip to the grocery store. You can imagine what a cross-country road trip could cost.

    Dealers will require that the vehicle be returned in original condition, less normal wear and tear. If you make alterations to the car that can be easily removed, you’re OK, but make significant changes, and you’ll have to pay to have the car returned to its original condition. Lessees need to read all the fine print to understand what is allowable and what is not; it's important to note that every lease has different terms and conditions. Don’t assume that because you could do something with your last lease, you can do it on your next one.

    Another drawback is that when you lease, you’re really just renting the car for a few years and financing the portion of the car’s life that's covered by your lease term. At the end of the lease, you will have no equity in the car, and no value to apply as a down payment on your next car. If you like the car and want to buy it, you’ll have to take out a loan, and that loan will incur a higher interest rate, since you will be financing a used car.

    It’s often only shoppers with good credit scores that will qualify for a car lease (especially those with manufacturer subsidies). If your credit score is less than perfect, you may want to consider waiting to lease until you can increase your credit score, or looking for a certified used car with a similar payment. Buyers with challenged credit can sometimes lease vehicles or acquire someone else’s lease, but it can be more difficult than purchasing a new or used vehicle.

    Leasing customers need to make themselves familiar with all of the fees involved across the entire duration of the lease, from inception to conclusion. In many cases, the end of the lease is not as easy or cheap as simply dropping off the keys and walking away.

    Benefits of Buying a Car

    If you tend to keep your vehicle for a long time, buying is probably a better option for you than leasing. When you buy, you own the car outright when the loan is paid off (though until then, the lender owns the vehicle). Throughout the length of the loan, you gain equity in the car as long as your payments outpace the depreciation of the vehicle.

    At the end of the loan, the car belongs to you, and your lender will transfer its title to you. Other than the basic costs of ownership – gas, insurance, repairs, etc. – you won’t have to figure any car payments into your budget.

    Another huge benefit is the lack of a mileage restriction. If you live in a rural area or have a significant commute, this can be a huge advantage for buying over leasing.

    Drawbacks of Buying a Car

    When you buy a new car in the traditional way, you’re open to fluctuations in its market value when you decide to sell or trade it in. Though there are some pretty good predictors of future market value for specific models, you can never be sure about how changing market conditions might affect its value.

    With leasing, the future value is predicted up front. If the car is worth less than that amount at the end, it’s not your problem. If you have a car loan and the car is worth less than the loan balance, you have negative equity (also known as being upside down or underwater). This is only a drawback if you plan on selling it or trading it in, because you’ll have to come up with the difference between what the car sells for and the remaining loan balance. Many dealerships, however, will be more than happy to roll that deficiency balance into the financing for your next vehicle (not a good idea, but that’s a topic for another day).

    Another potential drawback of buying is a sizeable down payment. Many lenders require 10 to 20 percent down when taking out a car loan. On a $30,000 vehicle, that’s $3,000 to $6,000, and it can be tough for people to save up that much money, especially if an accident or other unexpected circumstance requires immediate car replacement. Some special loan programs allow buyers with excellent credit to forgo the down payment requirement and finance 100 percent (or more) of the price of a new vehicle.

    One other downside of buying is that, in trying get the monthly payments to fit your budget, you may be enticed to extend the length of the loan. Loan lengths are trending upward, with new loan products available that can stretch your payments out eight years or more. You could end up with a car loan that feels more like a mortgage.

    Longer loan terms give more time for interest to compound, and the interest rates tend to be higher due to the riskier nature of long-term loans. You’ll end up paying more in total payments for the car than if you had a shorter loan term. You'll also be more likely to be underwater on your loan if you have to sell the car while you're still paying it off.

    A larger down payment will help lower your monthly payments on a car purchase, but again, coming up with that much cash can be difficult.

    From: https://cars.usnews.com/cars-trucks/buying-vs-leasing
     
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  7. WootHosting

    WootHosting Registered Member

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    Leasing a car can be good for you and the lease company!

    If you go out and buy it you'll have something to look forwards to.

    IMO, leasing is better if you want a new car, let's say, every 2 years. It's efficient but not your car. Dilemma there! Depends if you can afford it!
     
  8. redarrow

    redarrow Elite Member

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    Survay quistion or school ....

    Buy .
     
  9. drey2k

    drey2k Power Member

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    With the low rates today buying a new car is starting to look stupid.

    Never lease a used car.
     
  10. honestwork

    honestwork Registered Member

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    It depends how much you are using it and travelling it , if you are not travelling quite often then yo should lease a car