Buying vs. Leasing a Car (Pros and Cons)
In this video I discuss whether you should buy or lease a car. So which is the better option? The truth is that there are two aspects to this decision.
There is the mathematical decision, and the personal situation decision. Some people like to drive new cars every three years, so they think it's better to lease a car. Some people like to drive cars longer than those three years and take care of their vehicle, so buying a car may be a better option for them.
Leasing a car is generally better if you're the type of person who likes new cars every three years. There are pros and cons to leasing a car vs buying a car. Some of those Pros is that you know you'll have a modern vehicle with all the updated amenities. However there are also some restrictions when leasing a car that you should be aware of.
Buying a car is generally the better option if you were someone who likes to hold on to their vehicles and likes the repair and work on them yourself. if you hold on to your vehicles for five or more years, it usually makes all the sense in the world to buy it and drive it into the ground. The person who owns their car can also sell their car at the end of ownership allowing them to recover some value of the vehicle. You can't do this if you lease your car.
Watch the entire video to find out if you should buy or lease your car!
Sources:
It was easiest to use the numbers from the Khan Academy video below because there are SO many different situations when it comes to Buying vs. Leasing a car that CANNOT be covered in one video. There are so many different makes, models, and manufacturer incentives that change over time. I decided to stick to a general overview for this video, along with my personal opinion at the end. For the original numbers please see the link below. Thanks again for watching! 🙂
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Argued with my ex about this. Well theres a reason shes an ex, and a reason shes always broke.
well we all know that some women think they know everything..it’s hard to debate with someone devoid of logic and mentally all over the place..
A bit misogynistic, no?
@@HM-dw4bp he did say some. I would agree both are very capable of being know it alls.
@@HM-dw4bp .did you read the word SOME before you responded???So i guess if someone said SOME guys are aggressive or liked casual sex,you would have something to say as well????So in response to your question,NO,you dont have a logical position to even ASSUME anyone is a misogynist…next!
@@madjackgamingandfitness498 ..yeah,i love when someone chimes in directing their two cents to anything except the subject..that should have been obvious that i did say some,yet because some folks have nothing to do but be petty,that’s what makes the world what it is..
No you’re not rambling I appreciate the information you’re giving us I wish they taught us this stuff in school along with real law
You and me both bro, you and me both.
They will never teach you these in school, that’s how the whole system works. School will help you get basic understanding and education but you have to be the one to utilize them to figure out these loopholes in our system.
He is just like a teacher, completely wrong.
that’s why there are certain courses to take like for example busniess
Actually it’s called basic maths. He’s just using sums and multiplications…
As someone in the retail automotive industry. I wish I could show every customer this video. Too many times I’ve come across customers who have no idea what situation their in. Great video!
I am interested in purchaseing a new car. I am researching brands and have settled on two but Don’t necessarily want to get locked in to one over the other. Is leasing a good option to see how each brand fits in my lifestyle?
Buy a used car and marry a mechanic.
Lol smart
Hard to find a nice female mechanic to marry lol
@@9Achaemenid 😂😂😂👍
Lmao
Shady bitches everywhere!
I’ve run this scenario on a few different cars. I’ve found that it’s a hit or miss, depending on the terms they give you for the lease. The muscle cars always worked out to heavily benefit the buyer, whereas brands like Mercedes Benz nearly always benefit the leaser, assuming the buyer also sells after 36 months and buys a new luxury car. You can keep it longer and it begins to balance out, but if you’re the type of person who’s already sold on buying luxury, you probably always want the newest one, so the lease will be your best option.
I lease as often as I can. I always trade them in for a different car, always have a positive equity when I trade in. I like most people always have car payments. Mileage is never an issue since I always trade them in before the lease term ends. So, it’s the benefit of low monthly payments, positive equity during the trade in. No maintenance cost, and new car every 3 years!
Agree I prefer leasing. I’m only 7 min away from work and if we need to travel long distance we use another vehicle. I also take care of my cars that I lease. If I’m making payments I consider Myself the owner. I prefer updates every 3 years.
How many miles can you drive on average ? Looking to either buy or lease just have questions
James Hall you can drive what ever miles you want to drive as long as you trade it in like any used car or buy it at the end of your lease
Well, since we are all going to die anyway, it really doesn’t matter.
@@crazyoldbiker938 best answer ever
From the number 1 BMW salesman in the country (yes he was awarded that title more than once) he stated “Buy used, lease new”
I’ve been buying used with cash my whole life
Who is the n1 salesman in question?
Some CPO’s you can lease…idk why you would
DoughnationCreative hahahahaha
spoonerdee Hahahaha buy a used bmw? Good luck if you’re not mechanically inclined.
Excellent video. One other thing to consider is the opportunity cost of the difference in money spent on purchasing vs leasing ($465 – $159 = $306/mo). Provided you return the car after the lease term ends, that’s a difference of $11,016 over 36 mos. True, you are forfeiting any equity in that car and were essentially just “renting” it for 3 years. However, you did likely get a lot of utility out of it, so that saying of flushing money down the drain that a lot of people parrot mindlessly isn’t entirely accurate.
Putting that $11k to use on an investment or side hustle will likely generate far better returns (both monetarily and in terms of educating you), than the relatively nominal difference that would have been saved by purchasing over leasing then buying the car out ($1,184).
Either lease a car to keep your monthly overhead low, return it when the term is over, and reinvest the difference into an asset that kicks off cashflow. OR buy a pre-owned car that’s 2-3 yrs old and has already depreciated substantially at someone else’s expense.
Purchasing a brand new car is one of the worst investments a person can make. You’re buying a depreciating product which consumes a large chunk of your monthly income that you have to pay out of pocket to maintain. Buy used or lease new.
🙌🏻
Finally someone call out his direct bias, which he states multiple times
Better to buy slightly used.
@@redcloud5813 not in this market. Period.
@@fabrice8940 I agree, now is not the time to buy a car, new or used, because of the chip shortage.
I’ve done both. Basically, if you like to drive a new car every 3-5 years, go with the lease. If you keep your car until the wheels fall off, then buy. Leasing does offer some advantages over financing….. 1) You can transfer the contract to anyone else. 2) You can drive a luxury car at an economy car payment. 3) You pay sales tax on the payment and not the entire vehicle. 4) You don’t have to worry about trade-in value, just turn in the keys. Of course there’s also downsides such as needing to carrying higher insurance limits, mileage limits, GAP insurance and fees like bank & disposition fees.
Seems like leasing is a no brainer then
While I completely agree with you in the case of this type of car – a sub-compact at $17,700 – leasing can end up being the better choice for certain situations. Particularly with some luxury cars or high end trucks, where you’re going to be hit with much greater depreciation rate and more expensive repairs when it’s out of warranty. You also face certain risks in ownership that you don’t in leasing, such as the diminished value you’ll get from your car if you get in an accident at some point (even if the damage is repaired) or if the car turns out to be a lemon. And depending on your personal cash flow and/or how actively you invest, the value of the lower monthly payments in lease and having more liquid cash on-hand also shouldn’t be ignored when considering options.
well, if you lease the car, and have an accident you will be crushed by the company, because you have to send it to a repair shop that the company agreed upon, and that’s very expensive, and also while you want to return it you have to pay some money because you damaged the car, my opinion buying that piece of **** , and then you have a total feeling of owning it, and not everyday thinking if something happened to it, how much I have to pay the company.
@@Mr.PM1993 I have to disagree here. I leased 2018 Accord and was involved in an accident in 2020, the accident repair cost around 40% of car value. Later couple of months, the dealership contacted me randomly if I wanted to have a new lease car, I happily returned it and got even a better deal on 2020 model.
If you could afford a high end car, you wouldn’t need his advice. Like a person who owns a Cadillac is a person who doesn’t care about gas prices/consume.
Now that used cars are going through the roof, does that mean your new car now has a lower residual value and you won’t lose much when you drive off the lot?
I’m trying to scroll down through comments for opinions on which one is better to lease or to buy. It makes it hard to find one cos everyone is talking about the green marker 😩
Like he said, it depends on you or your situation. He seems to lean toward buying (used), as most people will from a financial standpoint. Maybe you just gotta ask yourself some things or make a pros/cons list. Are you a car person? (yes-buy, no-lease) Do you develop emotional attachment to your cars or other things? (yes-buy, no-lease) Do you prefer to have “newer” things? (yes to both…) Don’t take this as professional advice as it’s just supposed to help you think.
Leasing is MUCH MUCH easier and you end up in the exact same place overall. His 12,200 sale price is approximate (good luck selling your car privately) and in the lease if you want to keep your car you know that is the right price to buy it for.
See my comment I made.
If you consider a high end car I’d lease . If you want just a nice car like Chevy ford consider buying a 1-2 year old one with factory watery left on it and extend the warranty too. Also stay away from 6-7 year car loans. They’re designed to put you in a car you’re not ready for same as a 30 year mortgage
Not sure what you ended up doing, but if you are looking at a quality vehicle that lasts, I’d say buy instead of lease. I was one of those people that constantly bought and traded in after like a year, and then leased a car for 3 years. I purchased an ‘11 Lexus suv with 32k back in like 2014, then traded it in a year and a half later for an Audi 2 dr then traded my Audi for a lease on a brand new civic touring. I liked the option of the civic. Anyway, now I’m looking for another car and I wish I had just kept my Lexus because it would’ve been paid off by now and I’d have a relatively nice quality vehicle with less than 100k miles on it. But if I want that same vehicle now, I’d have to find one with low miles and I’m looking at spending another $15k on top of all the money I’ve already spend to end up with no vehicle.
I think it all depends on what works best for you, which is why it’s nice to have videos show you both options like this! My very first car I ever had was gifted from my parents, but it was a beat up used car for $2,000. It lasted me 3 years and I loved it. When that broke down I ended up financing a new Nissan with my dad as a co-signer because I drove a lot of miles to and from school, so I needed something reliable. What did I find out? Just because a car is new, does not mean it won’t have issues. Now I’m negative in my car and can’t wait to pay it off to get something different. Whether you decide to lease or finance, just do your research on the vehicle beforehand and make sure you really like it!
This
Now it made me think to lease instead of buy. I want to change my car every 3 years and I want to get rid of those costly maintenance fees when the car reached at least 5 years. Watching in 2020. Thanks for this very informative topic. Your voice sounds very pleasant to listen to.
Well, since we are all going to die anyway, it really doesn’t matter.
@@crazyoldbiker938 are you going to post this at every comment 0?
@@arhanjamesdulger904 lmao
I like to lease my car because I like luxury cars with the latest technology, body style, and very little maintenance. I also enjoy the way new cars drives versus broken in used cars. I negotiate the extra warranty and gap coverage. I factor in the amount of road trips I take a year into my mielage allowance. In three years I look forward to experiencing my next new car.
Nothing wrong with that. I prefer owning cars outright.
Well, since we are all going to die anyway, it really doesn’t matter.
Remember , you are going to pay for the rest of your life . I don’t want to be a slave .If , I was a car dealer , I will love to have a costumers like you !
Better buy and keep it for a long time !
@@Chris-yp1cd You’re going to spend your money on something weather it’s a car or something else in life. I can’t take the money with me when I die so I’m going to enjoy my life. My ride is a important part of my life that I enjoy.
WhoDatizz602 , nope , I am investing my savings. Have my own apartment/house or in the stock market instead of paying/renting eternally and leave nothing for my children when I die . I want to have good money when I retire and even leave a legacy for my children. That is why , I am spending my money wisely and making good financial decisions. Why should I spent hundreds of thousands of $ in the long term to upgrade a car that will never belong to me .
Do you have consistent income? Do you like having a new car every 2-3 years? Do you not mind having a car payment of about $400-500 a month (minus insurance)? Do you not drive much or live close to your job? Do you like the piece of mind that if something weird happens to your car, about 95% of the time, you will not be responsible for it? If yes, then leasing might be for you!
Do you have limited income, are you car savvy or know a mechanic, do not care for a new car all the time, don’t mind getting a used car with a payment of about $200-400 a month, and want the peace of mind knowing you can do whatever you want with the car? Then buying is for you!
I agree 100% it’s hard to beat driving a car for 3 years turn it in and get the next new car. I have been leasing for over 12 years and have not been to a mechanic the whole time other than an oil change. I don’t even change the tires in three years. I get a nice dependable car and I don’t have to deal with hassle of selling my car at the end. I love it!
@@victorsr6708 so you are basically renting a car. Is that any different than renting a house? In the long run its money down the drain imo
@@fabiannino4106 but how is it money down the drain to lease when at the end of the lease you would have paid the full price of the car just within an expanded time frame? I don’t understand, is there something more to this?
I believe you should do what works best for you. AND especially what you love because you never know when your time is up. My brother leased every 3 years since he was 18, yes I though it was a waste of money but it made him happy so in his mind it was money well spent. He died of ruptured brain aneurysm at 28 a few months ago. He was literally alive one minute and gone the next, he couldn’t be saved. Plus he had a lot more money in the bank then I do.
@@Anonymous-ji4sb I’m sorry to hear about your brother, I’m a physician and I literally am terrified for my patient’s with aneurysms because we usually find them due to other reasons. Most of us are walking around right now not knowing we could have one. Hope you’re staying safe out there.
Marco – I just wanted to say thank you for all of your videos! To me, you are like an awesome older brother (even though I am way older than you!!) that takes the time to explain everything very carefully to a younger sister whom needs cliff notes versions of complicated ideas and ideals! Keep them up! I have told both my daughters’ ion their 20’s to subscribe and learn!
Real life scenario, my friend and I got the same truck, same day, same price.
He financed over 7 years with a down payment of $1,500. At a payment of $256 biweekly. For a total price of $48,000 over the 7 year term.
I leased 3 years with a down payment of $2k. At a payment of $141 biweekly. After 7 years I will have paid $31,660 for leasing 3 trucks.
His truck might still be worth around $10k after 7 years that he sells.
So he paid $38,000 + the possible cost of repairs and maintenance. (Excluding oil changes)
Where as I paid $31,660, drove 3 brand new trucks and had $0 in possible repairs and maintenance.
If he pay $48k in 7 years the truck wouldn’t cost only $10k
@@EuSoumMiTo i think it’s because of the annual depreciation of his friend’s truck
@Don K lmao I found the friend
Things were missed which are pros to leasing and extra cost to owners:
– paying insurance
– paying we call casco(insurance in case you caused trouble)
– changing tires
– providing spare cars in case there is problem with the car.
– in case of accident, they will take care of the lawful actions
– paying mandatory service session are included
You don’t have to pay insurance for car?
@@Dabal_R You have to but it is included in leasing.
@@dnielrable included in the total price of a car?
@@Dabal_R my comment is not related to buying a care, but unlisted pros of leasing…
If you lease an electric car all you need to maintain for the duration is wiper blades, washer fluid, tire rotation, and cabin air filter. That’s it. You won’t need new tires or brakes in 36 months. Easier to budget with a lease, no surprises.
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They have more important things to teach kids, like systemic racism, and how to be gender fluid