Buying vs Leasing a Car: Which is Cheaper?

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Hello 👋 I’m Humphrey, I used to be a financial advisor, worked in gaming/tech, and started my own eCommerce business. I make practical, rational content on investing, personal finance, the news, and much more with a data-backed approach. My goal is to help you with financial literacy and creating wealth.

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⏱️ Timestamps:
0:00 - Start Here

[daleyfun]

The trick is to stop buying new so the car companies a forced to stop charging insanely high prices. If everyone said no to new prices they would have no choice but to lower so they can stay in business.

[aidan]

Ideally I would save up and get a reasonably priced car in order to buy it outright

[FahmeedRokon]

Buy Japanese, Lease German, Rent American. That’s how you should see cars.

[easymunch]

At the end of your lease, always check your buyout price and compare it to the current market value. I’ve been able to make a good chunk of money on my last 2 leased vehicles at the end of the contact buying them out and selling them.

[EliBuildsThings]

I bought a $600 used car as my first ever car and I still use it

[kyle]

I bought my car 10 years ago and haven't made a payment in almost 5 years. Have always taken good care of it and now it's taking care of me. Over 190k miles and just basic maintenance has been needed, not burning oil between changes. And guess what, it's not a Toyota, it's a Ford lol

[ilkeryoldas]

Cheapest option is to buy a used car.. ideally 3-4 y.o.

[joeadams]

The cheaper option is buying a 7 year old one with low miles for 6 grand cash. Ya boy has 2 nice cars in his driveway and 0 payments

[dominic]

Bought an older 7 series BMW for £6k. New the car was £84k. Had it for 8 years and very little problems other than general maintenance. Saved a fortune 👌🏻

[djhudgins]

Buy a used vehicle from someone, which may end up meaning a personal loan if your bank won't finance it for you (either too old or too much mileage). The dealership and manufacturers charging so much these days, this is the only way to fight back. On the plus side buying an older vehicle means you can research what years have the least issues, that usually means a higher resale value which will cost you more, but IMO its better than shotgunning a brand new vehicle that may have bad problems from engineer/manufacturing oversight.

[Lyfesreal]

I work from home, so a lease worked out for me.
$300 a month to drive a mid trim mazda cx30 (30k msrp) with 0 out of pocket down, vs I would've had to put 3-5k down on a 5-7 year loan to get a similar payment.
I can buy it once the lease is up like its a CPO that I know exactly how it was handled by the previous owner (myself). And if ended up being a bad car.. its not even mine I don't have to keep it.
That being said, lease rates were great early 2022- not anymore and everyone's situation is different.

[walterpearlman]

Don’t ignore the damage assessment when turning in your lease as put of the bargain

[andrewforest]

Leasing also allows you to not have to worry about dealing with car repairs because anything that breaks while you have it it most likely covered under the warranty.

[greatvalue]

Why does no one talk about the option to buy the leased car at the end of your lease contract ?

Then you have the leverage to not owe more on your car loan than the actual value of the car in the event the car depreciates quickly.

I believe leasing a car is a better option because you have the option to buy the car if your above market value and or just return the car at the end of your lease agreement if it’s less than market value.

[mikeb]

Never finance a car. Never finance anything except a house or other appreciating asset. All you’re doing is giving the bank your money. Instead, buy the cheapest and most reliable car you can pay cash for then save the money you would have paid each month on a loan/lease and in a year or two use that to buy up. I just bought a 2019 4Runner at $31k by following this tactic for just under 10 years now. This time though I may keep this one for a while and save the money for something besides a car.

[NoNameFish]

Is it different for people doing 1099 work? Is it easier to write off a leased car as a work expense then a car you buy for the long-term?

[chrisroberts]

Leasing also means you are connected to that dealership even after the start of the lease. The second salesperson ("F and I") will play on your fears about costs for wear and tear and get you to buy "protection plans" that are pure profit for the dealers. With leased vehicles since you do not own it they can really play up your fears.
Gap insurance is one thing that may be a good deal to but from the dealer - however, compare what your own insurance company will charge it is often is lower cost than the dealer's F and I will charge you.

[CyrilJanDacasin]

Went to trade school for automotive technology. Bought my car used at around 55, 000 on the odo and paid cash. 4 years and another 50, 000+ miles later and still going strong. 💪

[pgplaysvidya]

i buy new because i barely use the car compared to 'average'. I'm at 38000k at it has been 4 years. the interwebs says the average is 16k a YEAR.

Anyway, if I bought a used car, it would be a car that has been driven for 3+ years bc you can't really lease a car for a single year. that means that car has on average 50, 000 km USED, and would only be 3 years old. I would have to drive a new car for 6-7 years to get to that.

there's lots of factors. used is cheaper but probably costs you more in the long run due to maintenance. you don't know what the last person did to it. you could buy a lemon. scary stuff.

I know the convention is to buy used to save $ but i seriously don't know if that applies any more.

leasing? i would probably lease when i retire bc i can get rid of it easily and i can always drive new cars. plus i can 'afford' it by that point.

[EspianCeej]

I thought it would be cheaper in the short term to lease but more expensive long term since you gotta be leasing every few years?