Having just recently received my full license from the DMV of California, I am considering getting a car soon. Now, whether I lease or buy is still something I am deciding on. In deciding, I’ve done quite a bit of research, both on the web, and through many of my older friends who have had cars for years. I am sort of leaning towards buying a car, because from what I was told, there seems to be a lot of hidden costs that come with leasing a car.
Monthly Lease Payment
I do not mean to make car dealers look bad, but there are many out there who will rip you off, and you won’t even know it. Thus, it is important to beware, and not let things get to the stage where you get ripped off. Car dealers will often look at you, observe you, and put a monthly payment based on what they’ve observed. Obviously, the more gullible you seem, the more they are going to charge you. It is important to pressure the dealer by asking many questions regarding the cost.
Mileage
Continuously be aware of the cars mileage. Often times (some of my friends have even done this) people will jump right into a lease because the low payments seem amazing. They may be happy, but that happiness will only be temporarily. Once they have to return the vehicle, the car dealer may put a hefty charge because of high mileage. Do not go past the mileage limit.
Equity
You are not increasing you equity by leasing a car. You only own a car when you buy it – not lease it. Leasing is just like renting, right? You don’t gain equity when renting a car. You need to closely look at both the equity costs, as well as gains, prior to leasing a car.
For anybody who is considering leasing a car, I hope this helped. I’m sure there are more things to point out, but these are the main ones which I was told by friends, and from what I read on the internet. Be very careful before leasing a car – don’t empty your pockets when you could in fact avoid doing so, by simply being a bit more careful.
I was without a car and wanted to either buy a small car cash, lease a car or by it and pay monthly. I had a family member who sold cars and asked him about the leasing of cars. He said it was for people who could not afford to buy a car cash or pay monthly and that they wanted to be on top of the who list when new cars come out.
Their plan was that you would have a car for 2 years and then they would give you an new version after that period. Lets say after 4 years of leasing a car, you don’t really have anything to show. Yes, you paid monthly, but it was never yours and you don’t have that asset. It’s almost like throwing your money down the drain.
I eventually just saved up for a couple more months and paid cash for my car.
Leasing a car is only for people who move a lot, as in people who stay in one city four months, then move to another for seven months, then move to another for three months. In such cases it is easier, and more affordable to lease a car. Unless no other option is available I would always recommend buying a car.
Hey Gooroo,
Nice theme!
I worked in a car dealership for a while and your advice is rock solid. There are a lot of factors to take into consideration. Don’t rely on the dealership to educate you!!! Do your homework and understand all of the terminology!
Good one, Gooroo.
George
George,
Looks like we have the same theme!
Glad to see my advice is accurate. It is definitely important to do your homework before buying/leasing a car.
BTW, how is it working in a car dealership? Its always been a jump that has interested me.
George,
You couldn’t have said it better. I completely agree with you — leasing a car seems almost pointless. Like you said, “it’s almost like throwing your money down the drain”. If I was in your situation, I would have done the exact same thing — saved up a few more months, and bought it. I think leasing is only a good option when..you have no other option.
Jason,
That is a good point. I would say military personnel would be best off renting a car (unless they have sufficient funds to buy a car). Why? Because they move often (usually every year or two). This is just an example. Others who know they will be moving should probably not buy a car.