So I'm back to the decision of acquiring a new car; I've been driving my 2000 Honda Civic for more than four years and it's getting a bit boring. I've always thought that leasing a car is stupid and that I'd prefer to buy a car and then drive it till it falls apart, but now that I'm getting bored of my current car while it's still in nearly-new condition I understand that there are other considerations than merely long-term cost.
So I'm doing a bit of reaseach on leasing and I found a great set of pages that explain the process and costs in simple terms and explain what factors can make leasing superior to buying, or vice versa.
Leasing makes more sense if you can live within the yearly mileage limitations. If you're predominantly a city-dweller, this is probably easier than if, like me, you live in a more rural area and have a 30-minute daily commute to work.
I've financed all of my cars... and I've learned that unless you truly want to drive it until it's completely paid off, you gotta get a vehicle that's going to hold its value better. My last car was a 2000 Dodge Intrepid. It was a nice car, but the resale value is horrible... and I ended upside-down on the loan by a lot.
I finally decided to get rid of it back in March. The mileage was approaching 100K and I just didn't trust it to last through the time I had left on the loan... so I sold it to my boss (it is now his son's first car) and rolled the negative equity into my new car... a 2004 Honda Accord sedan. Thanks to Honda's great resale value, I'll break even or come out ahead on the car far sooner than I would with almost any other vehicle. My choice wasn't entirely a financial one, though. I really like the 2003+ Accords... both in looks and in how they drive.
So yeah... leasing makes more sense if you can live within the mileage limitations.... but for the rest of us, financing is quite often a better option.
My car has 172,000 miles on it, so I guess I elected to run my car into the ground before getting another. But there is certainly nothing wrong with you getting a different car.
I'm with you on that one, Mark. I have a commute 35 miles each way to work. I also teach 3 nights a week and that makes my overall commute approach nearly 100 miles a day, a few days a week.
I bought an XG350 last year not only becuase its comfortable to be in for long periods of time, but it's warrantied bumper to bumper for 100K miles. I financed because there's no way I can stay in the mileage limits of a lease.
I got around the resale problem (XG's have a horrible resale value) by getting mine as a slightly used (9K miles) repo, so I paid only about half of what it originally sold for.
I actually owe less than its worth, and should just break even when its time to get a new car again.
MW: There's some good Internet deals to be had, like I got. I'll have to look up the service, but you can fill out a form online describing exactly what you want, how much you want to pay, how far your willing to drive to go get it, and you get notified when there's a match.
I bought mine about 72 hours after it hit the auction block. XG's go for $29K, fully loaded. I got mine nearly new for $15K, with the full warranty. Couldn't have justified buying it for full price.
All of my previous cars have been slightly-used cars and, with this Accord being my first brand-new one, I don't think I'll go back to buying a slightly-used car ever again. My car had 3 miles on the odometer when I drove it home for the first time.. and there's nothing quite like driving a vehicle that you know no one has driven or owned before.
But.. that's just me.
JP: Let me know what that service is.
Mark: I feel similarly, but if I can get a slightly used car that's got a while left on the warranty then I wouldn't mind much.