Joyce
TUG Member
Like to get a new car every year after it goes off warranty. In this instance is it better to buy or lease. Am I loosing too much equity if I trade it in so soon and pay for it upfront?
We have been paying upfront in full and trading it in every 3 years for a new car. I have always wondered like OP was to whether it is cheaper to lease or to pay upfront and then trade in. I know buying new cars lose more money than buying used, but that is not the question. The question is to lease or pay upfront in full.
Like to get a new car every year after it goes off warranty. In this instance is it better to buy or lease. Am I loosing too much equity if I trade it in so soon and pay for it upfront?
.....
DW + I are both retired and I don't see the need for 2 cars, but DW wants two. She says we need two if one of us goes out of town or if one car breaks down. We should keep the 2nd car as a spare. My reply: It costs us $$ just sitting in the garage and in those rare events, we can rent a car for a few days.
.
I agree, too much room in the house, not enough room for the cars.I love cars. If money is no object, I would live in a 1000 sq foot home with a 10-car garage.
I think either way, buying or leasing you take a big loss but leasing would give you less hassleLike to get a new car every year after it goes off warranty. In this instance is it better to buy or lease. Am I loosing too much equity if I trade it in so soon and pay for it upfront?
We have been paying upfront in full and trading it in every 3 years for a new car. I have always wondered like OP was to whether it is cheaper to lease or to pay upfront and then trade in. I know buying new cars lose more money than buying used, but that is not the question. The question is to lease or pay upfront in full.
The question is whether it's cheaper to lease, or buy -- given that they're ridding themselves of the car after approx 3 years either way. I think the answer is dependent on how one would dispose of the car at the end of the 3 years. I think if you let the car go back to the dealer in both cases (lease return vs trade-in on new) it's going to be close to a wash -- the dealer will use a depreciation schedule for a trade that's not significantly different than that of a lease. If you compare returning the leased vehicle to selling the owned vehicle on your own, then you'll likely come out ahead by buying and selling.
I think either way, buying or leasing you take a big loss but leasing would give you less hassle
What is good advice for one person may not be the right advice for another.
Leasing, financing, paying cash, what car to buy, buying new, and buying used are all financial tools at our disposal. Each tool fits a set of needs and desires, and a specific situation.
For the initial post, "Like to get a new car every year after it goes off warranty. In this instance is it better to buy or lease. Am I loosing too much equity if I trade it in so soon and pay for it upfront," there just isn't enough information. There is SOME information: Joyce likes having a new car, frequently. this makes Joyce's situation different from Talent312's. Joyce wouldn't be happy buying a used RAV4 and driving it 200,000 miles, just like Talent312 wouldn't ever consider buying a new car every year (or two, or three).
Joyce might be a good candidate for leasing. If so, the best deals are often on cars that are in their final year before a style change. An example would be the '17 Volvo S60 and XC60. Volvo and their dealers need to clear these cars out before the redesigned '18s hit. A lot of money is being put on the hood, and rebate money counts more toward lowering a lease payment than it does a finance payment, because of the shorter term and it being a higher percentage of the depreciation.
Also, because Joyce is used to not having payments, she could be a perfect candidate for a one-pay lease, where the finance charge is reduced in exchange for all the payments being made at inception. Details on one-pays vary from manufacturer to manufacturer, so check the contract. One-pays tend to be more popular on luxury vehicles, where the customer has the cash but still wants to take advantage of the benefits of leasing.
I was also unaware of the 'pay upfront' lease. I could definitely get behind simply paying upfront for the depreciation for a set term with the knowledge that on a date certain, I return the car ( in good shape, with agreed upon miles) and walk away. Reading Conan's account of the finances, though cast some doubt on the likelihood of this actually happening. It bears looking into.So many good ideas and suggestions. I am surprised to learn that one can lease and pay upfront. At this point the thought of car payments is not a good thing for me. I like to pay upfront and if this works with the dealer I choose,I'm in. I will have to investigate this. Thanks for all your insights. Joyce