Leasing a Car vs. Buying a Car

• Barry Badrinath

  Thinking about leasing a car. As a graduate student, this will be my first big purchase. I really know nothing about the process and how it works/how to go about it. I'm planning on trading my current car. How does trade-in value factor in and what should I look out for?
  
  What are the benefits of leasing vs. buying a car? I know dealerships are desperate to sell cars with the way the economy has been. Any negotiating tactics or effective ways to drive the price down?
• said_aouita

  

  Buying a car means you are making payments towards ownership. Leasing means you are making payments to borrow the car.
  Go the lease route and you can only drive X amount of miles while borrowing the car.
  
  Lots of dealerships have specials on new last year models. Stretching out the payments another year or two on a purchase is better than lower monthly payments on a lease.
  
  Buying wins over leasing- imo.
• ernest_t_bass

  

  Lower payments on nicer models in lease. Go with Honda. Best residual value.
• mcburg93

  

  Leasing is good for a second vehicle but watch the mileage. Not sure how much driving you do so that needs to be taken in on your decision. In the end buying it is the better way cause you will have a car in the end that is worth something.
• Ironman92

  

  With leasing you can probably swing a nicer car than you could afford to buy....but your money really isn't doing anything more than renting and the mileage can kill you.
  
  I've seen 2012 Accords for 19,995, with crazy low financing.....if you leased that car for two years you could offer to purchase....but it would be WAY more than just doing 36-48 or 60 month payments.....
• Con_Alma

  ccrunner609;1260404 wrote:... Buy a used car and let someone else eat the losses.

  This...then start saving to purchase it's replacement with cash.
• WebFire

  I always say if you are young and can stay within the mileage, then lease. Most younger people get a "new" car every 3-5 years anyway, so they never get the benefit of paying off and owning a car. They actually end up paying more.
  
  On the flipside, if you want to get a car and "drive it till the wheels fall off", then definitely buy.
• ZWICK 4 PREZ

  

  Buy a used car so you don't know what's wrong with it or how it was taken care of. It's a really good idea.
• ZWICK 4 PREZ

  

  Sorry, this isn't the opposite thread.
  
  Get a hold of an xplan pin or find out what xplan pricing is on the Ford and negotiate for that price. Don't lease. Don't buy someone else's mess. They got rid of it for a reason.
• believer

  

  ZWICK 4 PREZ;1260430 wrote:Sorry, this isn't the opposite thread.
  
  Get a hold of an xplan pin or find out what xplan pricing is on the Ford and negotiate for that price. Don't lease. Don't buy someone else's mess. They got rid of it for a reason.

  Eh, I've purchased used cars the last 3 times I've traded in and I've gotten a good deal every time.
  
  You need to do a little homework of course but good used cars (Honda, Toyota, etc.) with less than 40,000 miles on them are a better deal.
  
  You do not take the huge depreciation hit on the new car and like someone else said above, you can immediately begin saving for the inevitable replacement car in 3 or 4 years.
• sleeper

  

  Buy a used car. Leasing is for the birds.
• sportchampps

  My family owed a Honda dealership. I laugh at anyone who would lease. It's such a horrible deal. Even if your young and want to buy new every 3-5 years leasing will cost you about 30% more. Either buy a new Honda or Toyota that will keep it's value. I would recommend a scion tc or civic they keep their vale better then most and are ok on gas or great if you go with the civic.
• GoChiefs

  

  ZWICK 4 PREZ;1260430 wrote:Sorry, this isn't the opposite thread.
  
  Get a hold of an xplan pin or find out what xplan pricing is on the Ford and negotiate for that price. Don't lease. Don't buy someone else's mess. They got rid of it for a reason.

  Carfax and a good mechanic and you won't buy a mess. Some don't get rid of a car just because there is something wrong with it. I know plenty of people that buy, trade it in 2 or 3 years later without anything wrong with it, just because they want something newer or different.
• Cher

  Barry Badrinath;1260370 wrote:Thinking about leasing a car. As a graduate student, this will be my first big purchase. I really know nothing about the process and how it works/how to go about it. I'm planning on trading my current car. How does trade-in value factor in and what should I look out for?
  
  What are the benefits of leasing vs. buying a car? I know dealerships are desperate to sell cars with the way the economy has been. Any negotiating tactics or effective ways to drive the price down?

  You're better off buying. Only lease if you want to have a static payment each month for the rest of your life and don't drive very much. I can give you as many pointers as I can.
  
  Ways of bringing the price down: Shop around. There are plenty of websites online that will give you a general idea of how long a car has been on the lot. If the car is typically on the lot for less than a week or two, they aren't going to budge much since they know they can move it if you pass on it.
  
  What I did, is found a car I wanted (Hyundai Elantra) and went to a dealer and said "I want to pay $260/mo on this car, get as close as possible." They kept coming back from $290 to about $276. I then got up and went to another dealer and said "The first dealer I went to got it down to $260". They'll bend over backwards to get you to buy it then and there. If they try that BS where they go to and from their manager, just get up and leave. There's plenty of dealers that will just flat out come out with a price and you can take it or leave it. Ricart is that way, so is Byers in Columbus.
  
  I bought from Ricart. Dennis tried the manager swapping BS.
  
  I bought a new car in March and I'm PRETTY sure Honda isn't the best for resale value anymore.
  
  
  Oh , and dont tell them you have a trade/down payment until you're done dealing with them.
• Ironman92

  

  I've had 8 Used Cars and 6 of them have been great (1983 Civic 111,000, 1988 Accord 145,000, 1993 Civic 104,000, 1998 Civic 145,000, 2001 Civic 97,000 and 2007 Civic 55,000)....2 have not (2001 Cavalier 11,000 miles, 2001 Ford Explorer 45,000 miles)
• WebFire

  You should never negotiate a payment. Negotiate the price. And I disagree about leasing. They may not be the best in all situations, but they have their place.
• Ironman92

  

  Cher;1260462 wrote:You're better off buying. Only lease if you want to have a static payment each month for the rest of your life and don't drive very much. I can give you as many pointers as I can.
  
  Ways of bringing the price down: Shop around. There are plenty of websites online that will give you a general idea of how long a car has been on the lot. If the car is typically on the lot for less than a week or two, they aren't going to budge much since they know they can move it if you pass on it.
  
  What I did, is found a car I wanted (Hyundai Elantra) and went to a dealer and said "I want to pay $260/mo on this car, get as close as possible." They kept coming back from $290 to about $276. I then got up and went to another dealer and said "The first dealer I went to got it down to $260". They'll bend over backwards to get you to buy it then and there. If they try that BS where they go to and from their manager, just get up and leave. There's plenty of dealers that will just flat out come out with a price and you can take it or leave it. Ricart is that way, so is Byers in Columbus.
  
  I bought from Ricart. Dennis tried the manager swapping BS.
  
  I bought a new car in March and I'm PRETTY sure Honda isn't the best for resale value anymore.
  
  
  Oh , and dont tell them you have a trade/down payment until you're done dealing with them.

  
  I've tried to deal/buy from Ricart twice and it was beyond a joke. They treated us as if we were clueless.
  
  As for Honda's holding their value...we bought a loaded 2005 Accord Ex for $22,195 back in Feb 2005....this past winter in Dec of 2011 the Honda dealer we bought it from sent us a mailing and were offering a $9,995 trade in at 110,000 miles....almost 7 years old
  
  My 2000 Civic we bought for $16,175 in 2000...I totaled it in Oct of 2007 with 121,000 miles and my insurance sent me a $7,100 check to replace it.
• Cher

  Ironman92;1260473 wrote:I've tried to deal/buy from Ricart twice and it was beyond a joke. They treated us as if we were clueless.
  
  As for Honda's holding their value...we bought a loaded 2005 Accord Ex for $22,195 back in Feb 2005....this past winter in Dec of 2011 the Honda dealer we bought it from sent us a mailing and were offering a $9,995 trade in at 110,000 miles....almost 7 years old
  
  My 2000 Civic we bought for $16,175 in 2000...I totaled it in Oct of 2007 with 121,000 miles and my insurance sent me a $7,100 check to replace it.

  That is two very poor examples of holding value, but it's all subjective anyway.
  
  Ricart was willing to deal with me when I got there. Byers was the most straight forward though...they basically came back with a price and that was the final price...they weren't going to budge anymore.
• Ironman92

  

  Cher;1260490 wrote:That is two very poor examples of holding value, but it's all subjective anyway.
  
  Ricart was willing to deal with me when I got there. Byers was the most straight forward though...they basically came back with a price and that was the final price...they weren't going to budge anymore.

  
  How so? Car is 7 years old and way over 100,000 miles and worth over 40% of original value.
• Barry Badrinath

  I'm actually looking at a 2008 Honda Civic Si with 85,000 miles from Ricart at the moment. I plan on trading in my current 2002 Mercury Cougar. I'm pretty interested in the negotiating tactics at this point. Obviously I have had no experience.
• Barry Badrinath

  Mileage just seems a little too high for me for an 08
• sportchampps

  Over 15,000 a year is considered high milage and I would stay away. Ricart has a very bad reputation among auto dealers.
  
  Top 3 for resale by category
  
  Subcompact
  Honda fit
  Vw golf
  Nissan versa
  
  Compact
  Civic
  Mini Cooper
  Scion xb
  
  Mid size
  Camry
  Accord
  Altima
  
  Safe to say for beginners cars Honda and Toyota have great resale value
• sportchampps

  As for tactics they will bring out A four square paper. First square is sales price. Second is Trade in value.
  3rd is down payment. 4th is monthly payment. First anyone who brings this out is basically out to fool you. ( I would walk out). If they do this be smart enough to focus on the first two boxes. If they get you to focus on your monthly payment they got you right where they want you. You need to deal on the price of the car and your trade in value first. Do not accept what they tell you your trade in is worth tell them you need more or you will leave. There's a couple sites that will show you what cars in your area are selling for so you know what to get the price down to.
  
  If your unsure go look at a scion where all prices are the same your buying in Texas or Ohio.
• Cher

  sportchampps;1260521 wrote:. Ricart has a very bad reputation among auto dealers.

  
  YMMV with huge dealers like Ricart. They were no b.s. when I was there, but the place is huge.
  
  They're all shady when it comes down to it. If you're buying used, you can probably haggle them a lot more than on a new car.
  
  You might want to try Carmax if you're looking used
• Terry_Tate

  

  WebFire;1260470 wrote:You should never negotiate a payment. Negotiate the price.

  
  I've done it before, and honestly would do it again. Much easier than doing a price. I bought a used car and told them I wouldn't pay more than $150 a month. They ran the numbers and got me a payment of $145. Ended up taking the car below what I would have tried to get the price down to.