My car bit the big one...next step?

crazystepr

crazystepr

Cathlete
Yesterday, for the second time in a month, my car wouldn't start. It's a crappy Chevy with 105,000 miles on it and it will cost $500 to repair what needs to be repaired in order to make sure it will start when I want it to from now on. I have had more trouble with this car than I can say, so I've decided to bite the bullet and get a new one.

My question is...should I buy or lease? I'm leaning towards leasing since there are some good deals out there right now (I sooooo want a Volkswagen!!) and I don't drive that many miles per year. My father only leases cars--his motto is "only buy things that will appreciate. Why buy a car when the second you drive it off the lot, it's already depreciated?" I love the idea that I can just drive the car and pay the monthly payment for 3 years and then trade it in when the lease is up. But, I have very, very little experience with buying cars and don't know how I should go about this. Should I just go purchase a nice, used car?

Does anyone have any opinions/advice/stories that might help me decide? TIA!!!!

Allison
 
Hi Allison,

Sorry you're dealing with vehicle problems. We don't truly appreciate our mode of transportation until we no longer have it! My husband and I both lease vehicles and although I have heard all of the arguements against doing so, I'll give you my reasons:

1. At the end of your lease, you can opt to turn the vehicle in or purchase it . . . if you love it, buy it. If you see a newer make or model that you like better, then turn it in.

2. Vehicle is always under warranty.

3. I can budget for a consistent car payment, no problem. What I cannot do is budget for a $1000 repair that I don't see coming.

I just picked up my leased 2008 Ford Mustang GT a few weeks ago . . . and I am loving every second in it. I'm fortunate in that my husband is in the business - he obviously wouldn't steer us wrong when it comes to getting a new vehicle. Good luck to you whatever you choose to do.


Mo
 
Thanks, Shell. That's a great article!!

The only thing I was thinking when reading the article is that my monthly payments for the car would be the same whether I buy or lease the cars I've been looking at. So I wouldn't be spending any more money if I lease, right? Ugh. This is so confusing.

I don't need anything fancy. I just want a car that has less than 100,000 friggin' miles on it and will start when I put the key in the ignition!!!!! x(x(x(x(x(

Allison
 
Hi Mo,
Thank you for the advice! As you can probably tell, I'm leaning towards leasing--for all the reasons you stated. Thank you!!

Allison
 
Allison, how much do you drive? I only drive about 10 miles a week so a lease was a good deal for me since there's no way I'm gonna reach the maximum allowable miles.

A lease can be really great--other than getting regular servicing you don't have to worry about repairs at all. I have a 4 year lease & if anything goes wrong the dealer fixes it free of charge. Also you get an inspection sticker for the length of the lease so you don't have to deal w/those pesky annual appointments & worry about mechanics trying to rip you off w/unnecessary work.

People have said to me what's the point of a lease if you don't own anything at the end of the term? But when you buy a car, how much is it really worth after 4 years? Not to mention all the maintenance. Also when I turn my car in next Feb. I'll get all kinds of dealer incentives for the new lease.
 
Laura,
I don't drive that much at all, but the restrictions for leasing such as "don't go over the allowed mileage" and "if you ding up the car, you pay out of pocket when you turn it in" make me nervous. I feel like every time I drive that car out of the driveway I'll be a nervous wreck!

I still have to pay for repairs on the car such as brakes and stuff right?

Allison
 
Hi Allison,

Actually, the payments are cheaper if you lease instead of buy. It's kind of difficult to explain but I'll give it a try :) Say you lease a car that costs $30,000; the dealer figures the depreciation and says that the car will be worth $15,000 in 3 years (when you turn it back in). You only pay the difference between the $30,000 and the $15,000 so basically you're only "financing" $15,000. Then you add in the lease factor (which is kind of like a finance charge) and whatever other fees they throw in there.

I recommend you take someone with you who knows how to negotiate and who knows how buying or leasing works. Car salesmen will take advantage of you if they can:-(

We've leased all of our cars for the past several years with no problems. It's nice if you want to drive a nicer car that you otherwise couldn't afford:) We're leasing a $65,000 2007 Lincoln Navigator (it's the fourth Navigator we've leased)and our payment is around $700, to purchase the same vehicle our payment would be way over $1000 a month.

HTH and Good Luck whatever you decide.

Jacque

I just saw your last post and wanted to add something:) Don't worry too much about going over miles. Even if you do go over it doesn't cost that much. We were over miles on the last vehicle we turned in (the first time this had happened to us and it was because my husband had a lot of business in Phoenix and was making a trip a couple times a month and it was around 1000 miles round-trip usually) we only had to pay a couple hundred dollars. They allow for normal wear and tear on the vehicle so little dings and scrathes don't cost you anything. If you get in an accident you'll have to get it fixed before you turn it in. This has happened to us a couple of times and we never had trouble turning the car back in. You will have to pay for things like brakes but usually your brakes won't wear out before it's time to take it back. The only thing we've had to replace were tires and windshields. Also, if you're worried about going over miles get a lease that allows for extra mileage. Ours is 15,000 miles a year. It costs a little more for extra miles but it's better to pay for it this way than to risk going over and paying for them at the end.
 
>Laura,
> I don't drive that much at all, but the restrictions for
>leasing such as "don't go over the allowed mileage" and "if
>you ding up the car, you pay out of pocket when you turn it
>in" make me nervous. I feel like every time I drive that car
>out of the driveway I'll be a nervous wreck!
>
> I still have to pay for repairs on the car such as brakes and
>stuff right?
>
>Allison

I know what you mean, I was nervous at first too. Especially b/c when I first leased the car I was living in a house without a driveway. I had to park on the street & the first week I had my new car someone hit it! :eek:

Anyway, you don't have to be nervous. Generally you don't get penalized for dents that are smaller than the size of a quarter, so you wouldn't be charged for dings. And you have a variety of options when it comes to allowable mileage. My payment is lower b/c I chose the lowest allowable mileage since I knew I wouldn't even come close to it. But if it makes you worry just choose the option that you know won't be an issue.

You don't have to pay for any repairs except for maintenance. You might have to pay for wear & tear type repairs like brakes, but if you don't drive much you shouldn't have to replace them. I'm 3 mos. from the end of my 4 year lease & haven't spent a penny on anything other than my regular servicing. And BTW, I've only needed 3 during the entire 4 years b/c of how little I drive. In fact, I just hit 20,000 miles a few weeks ago. 20,000 miles in 4 years, which included trips down the shore every w/e in the summer. It's worked out very well.

I've just started the process of looking for my next car. I have no idea what I'm gonna get.
 
First of all, someone mentioned above that a leased car is always under warranty. This is NOT so! A leased car will have the same warranty as any other new car, whether it's 3 years/36,000 miles or 5 years/50,000 miles or whatever. If you only lease for 2 years, and your warranty is for 3 years/36,000 miles, chances are you will stay under warranty -- that is if you don't go over 36,000 miles in 2 years.

We have leased one time in our lives, and afterwards felt like we'd thrown away money for 2 years. We came out of it with nothing, obviously. I'm a huge advocate of buying a new car and driving it for years and years. I have a 1999 Mazda Millenia that has 165,000 miles on it, and it looks and drives like new. I feel like we made a huge financial gain for ourselves by owning and driving this car for 9 years.

Having said that... I'm a big fan of Clark Howard who is a consumer advocate in the Atlanta area. His website is a good source of information and here is what I found about leasing:

It's harder to compare prices on a lease, and the financing costs built into a lease are very high.

Leasing may seem cheaper than buying, but you're mortgaging your future when you lease. After a few years of leasing a vehicle and making payments, you own nothing.

Manufacturers and dealers like to use upfront fees to create ultra-low monthly payments that mask the actual cost of a lease.

Most leases allow you to drive an average of 15,000 miles per year. If you exceed the limit, you have to pay a penalty of 8 to 15 cents per mile.

Before you turn in a leased car, have it detailed inside and out and mke any needed repairs. Then find out what company is officially responsible for determining that the car is in acceptable condition.

A four- or five-year lease is a recipe for disaster. Many customers end up married to a vehicle they hate or end up paying severe early termination penalties.

If you lease for five years and your car is totaled in an accident, you could be responsible for a giant gap between the amount the insurance company will pay and the stated residual in the lease.

http://clarkhoward.com/shownotes/category/5/28/
 
Jeannemarie, it is true. I don't think it's called a "warranty," but any mechanical problems w/my car are covered & taken care of by the dealer. It might vary by lease, but my lease w/Mazda guarantees that my only out-of-pocket expenses for mechanical stuff are for maintenance only. Anything that breaks down is repaired on their dime.

Like I said, I have a 4 year lease & I would hardly call it a recipe for disaster. While I don't love my car (& never did, got it for practical reasons), I've never had any problems & when I have the dealer has taken care of them. And the idea of turning it in early never entered my head.

Also like I said, you DON'T own anything when the lease is up, but what do you own after 4 years when you buy a new car? Usually something that's worth >10K (unless it's a Mercedes or something). I'll get up to $5K in incentives when I get a new lease. Add that to the fact that I've been repair/inspection free over the last 4 years & I've found it well worth it.
 
"After a few years of leasing a vehicle and making payments, you own nothing."


Actually, most people owe more than their vehicle is worth, which is worse than nothing, and regardless of how you finance a vehicle, excessive miles and wear will be penalized through lease penalties or trade allowance.

Unlike buying, leasing vehicles can actually give you more flexibility and shield you from changes in the market because at the end of the lease you can buy the vehicle or walk away from it. This means that if a vehicle is worth more than predicted, you can come out ahead by buying it after the lease. Vehicle values are subject to supply and demand, just like any other commodity.

I've never detailed a car before turning it in . . . and normal wear and tear is expected. You will not be penalized for it. If you are realistic about your mileage when determining what lease terms you will agree to, you should have no problems.

Just a few more things to think about - as if you don't have enough on your mind already!

Mo
 
LauraMsx,

I guess we'll just have to agree to disagree on this one! :)

I just look at long term financial benefits differently I guess. I have owned my Mazda for 9 years. So, for those 9 years I have had no car payment, or repair bills to speak of. (We bought it outright with cash, so figure in that I spent just under $30,000 initially) I think we've put maybe $2000-$2500 total in it with routine replacements like worn out belts, etc. My car, in the condition it's in, is now worth $6000. The financial benefits of what we've done are great. Think of how much you will spend for 9 years (for comparison's sake) of leasing with a monthly payment each month!! I don't see how that is a good thing. But... as I said, everybody has different goals. :)
 
Oh - and one more thing - it is possible to lease a used vehicle. I have leased two used vehicles . . . a Chrysler Sebring convertible and a VW bug. Most people don't know that that is an option.


Mo
 
If you have a Chevy with 100,000 miles + on it, it sounds like you keep your cars for a long time. Leasing is best deal for people who like to turn over cars fairly frequently. If you plan to keep this car, buy it - it's a great time of year to buy - especially a 2007 model as the 2008's are on lot and you can get great deals. Pick a reliable model - some of the cars out now run nearly as well with 100,000+ miles as they do new. My friend finally surrendered her Suburu when it had 275,000 miles on it. And those were hard miles - high altitude and many of them over dirt roads, up mountains - she likes to climb the 14,000 foot mountains in Colorado. My daughter's used Honda Accord is running like a top with 60,000 miles on - and she's another one who's hard on cars.

Just my two cents, having been in the car industry.
 
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