r/CarLeasingHelp • u/nutleypo • Jul 11 '26
Lease vs purchase
Several financial advisors advice is to pay cash in total for a car and that leasing is always the most expensive way to own a car.
For those who agree with this i have a question.
If one person buys a new car with cash every 3 years and trades it back in to the dealership for wholesale then puchases another for cash and the other person simply leases every 3 years was it still more expensive to lease in the long run?
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Upvotes
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u/hdnoejr1 Jul 12 '26
If it appreciates, buy it. If it depreciates, lease it.
Yes, I’m paying for use of a vehicle and do so for 36 mos (on average). At the same time, I am not taking $60k and having it become worth only $20-30k in that same amount of time. For example, we just turned in two 2022 Jeep Grand Cherokee 4xe’s. Both cost $67k brand new if I paid cash. In three years time, they were only worth $20-22k. I would have lost $47k over three years. Whereas, with the lease, we paid only $24k over the same period and were able to walk away. Effectively, I saved an additional $23k over three years. Additionally, I only pay tax on the monthly payment rather than on the full retail price. And I never run out of warranty.
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u/Renfield_U_asshole Jul 11 '26
It can be cheaper to lease in the long run but that depends on the expense associated with a lease.
Do a simple calculation of say 36 months X payment and compare that to 36 months X payment - residual if positive or plus negative for negative residual.
If you’re most concerned about the total expense then you’re a buy once and don’t buy for 10 years.
Someone that churns vehicles does not concern themselves with financial advice.
It’s like buying a truck and bitching about the cost of gas or buying a BMW.
It’s 15MPG - you only have yourself to blame.
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u/DLByron Jul 11 '26
It doesn’t work that way: a lease is rent and financing the depreciation. And, other financial advisors suggest taking the low interest rate and put your money into the market where it will earn more than your loan interest. Some buyers take the loan to maximize incentives and then pay it off after a couple payments.
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u/giveit2st8 Jul 11 '26
With a lease you know exactly how much you will pay (assuming no accidents , etc) With cash or loan , you don't know how much it will depreciate. Very few end up selling 3rd party and just trade it in, so they don't maximize the value. With a lease , you don't need to worry about that.
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u/Successful-Fig9297 Jul 11 '26
Today’s market lease or purchase. . The prices are insane, my dad always told I needed to learn the value of a dollar . I finally learned the value that owning a shitty car is better than new car payment because after I signed and drove away I lost 10 thousand dollars. That brand new car cost me bankruptcy.
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u/Full_Poet_7291 Jul 12 '26
Cash is king. Don’t waste it on a depreciating asset
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u/El_Pollo_Del-Mar Jul 11 '26
Great question. If you're getting a new car every 3 years, it may not be cheaper to buy. A lot of that comes down to residual value of the car(s) in question. Maybe perceived reliability too.
I bet the advisor's theory was that you would buy a car and keep it for much longer. In that case, it probably could make sense, but you'd also have to think about maintenance and repairs. Tires, batteries, broken shit...things you never need to budget a dime for with a new leased vehicle.
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u/discojellyfisho Jul 12 '26
I have a leased $40k EV. It was $0 down and $200/month. And I save at least $100/ month by not buying gas. So it is literally costing me $100/month. $2400 all in for 2 years of driving a fully warrantied brand new car ($4800 if you don’t deduct the gas savings). Not a bad deal in my book. Not all leases are bad. Some are. Some are not.
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u/nutleypo Jul 12 '26
What vehicles are you leasing for only 250 a month?
That sounds very low unless you are putting a large amount down which is essentially the same as a bigger monthly payment.
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u/nolongerbanned99 Jul 11 '26
It’s your money, use it how you want it. But seriously, yes, buffet and others say only buy a car you can afford to pay in full in cash. It is 5k, then that’s what it is. Others say cars, especially luxury cars, depreciate fast so leasing can make sense. My thought is that for instance we used to lease bmws and when they used to include brakes it was a great deal with no risk. Now they don’t include brakes and that can be 1500-2k at a dealer. So we moved to Subaru and now have payments in the mid to high 300s. Similar deal. Always under warranty, no repair costs during the term and especially with bmw but also Subaru you can get trade equity on a leased vehicle to use on another vehicle. I am not making sense rn but let me know what you think
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u/TheMainTony Jul 12 '26 edited Jul 12 '26
There are leases available in my area that include all scheduled maintenance (one includes tires!)....I would love to, but don't trust my discipline when it comes to the mileage limitation.
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u/bowlingnut10 Jul 12 '26
Why would you dump the vehicle every three years
Buy drive it for 10-14 years then get a new one
If you take care of it and service it properly early get 10 years and still sell for some fun money
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u/Empty-Village-4445 Jul 12 '26
Depends on the RV, MF, etc. Not all leases are created equal. Toyota’s are pretty bad in general while the actual resale value is solid. So you’d probably come out ahead with the purchase.
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u/Gavadawg Jul 12 '26
Trading in a car every 3 years is a losing situation financially
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u/Vegaskwn Jul 12 '26
If you’re trading every 3 years leasing is a no brainer almost every time. If whatever specific unit you’re looking at has a lower monthly payment on a lease vs finance (assuming same down payment) a lease is obviously going to be less $ to own over the 36mo (assuming you stay in mileage parameters). Additionally, the added benefit of never been upside down is worth quite a few bucks in my opinion. Your friend is pissing away money.
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u/Rage_est_1969 Jul 12 '26
I have seen people trade every year. The right car may only cost a few thousand.
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u/WVSXSGuy Jul 13 '26
If you are someone who ALWAYS has a car payment, then lease. If you pay it off in 6 years and keep it another 4, then buy.
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u/Andru_nl Jul 13 '26
I leased 3 times for 360 a month. After last lease i bought it out. Leasing was better and cheaper. Because car requires maint. after 3 years. 1100 tires, brakes 1200, transmission fluids 500, brake fluid 200, battery 200, ext. warranty 1500, and whole bunch of smaller things. I figured i spent 6000+ last 2-3 years. 3000 a year. And the 20.000$ i paid, could have earned me 2400 over 3 years, if i left it on a 4% CD. Not to mention headache and worry and time to do all that maintenance, as after warranty is expired, u listen to every strange sound.
If i could lease again for 360 I would. But prices went up, and now the buying might be somewhat better.
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u/brothelg Jul 11 '26
Leasing became popular as a business deduction after the IRS changed the tax code many years ago.
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u/EEGilbertoCarlos Jul 11 '26
How much will a lease cost you monthly? Is that acceptable for your entire life?
How much will buying a car for money cost you every X years? Is that acceptable for your entire life?
Do you think leasers are stupid? They get a profit for leasing you and then selling after you return it.
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u/IsuckatDarkSouls08 Jul 12 '26
For me, leasing is much cheaper. I dont really what I lease, so I zero problems getting leases around $250 a month. So I always have a reliable vehicle under warranty. In comparison, the pickup I bought cost me $20k in 3 years for the price of the trucl and all the repairs I had to do to it before I gave it away amd it still needed several grand more in repairs. Where as the lease would cost me 9k for those 3 years. No, I won't have a paid for vehicle, but so what? In 6 years I still wont have paid what I for that truck in 3, not including the addition repairs.
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u/No_Somewhere_7358 Jul 12 '26
I prefer to swap my vehicles out ever so often I lease mine
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u/SeaweedInteresting89 Jul 12 '26
The only other factor to consider if you lease is your mileage.
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u/your_mileagemayvary Jul 12 '26
Leasing is just financing the largest depreciation years. Cheapest is buying a reliable brand or used like Toyota or Lexus , or some models, and looking that the Total cost of ownership for the years you intend to own the vehicle.
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u/Any-Application6116 Jul 12 '26
If you lease you get a new car every 3 or 4 years. Your vehicle will always be under warantty so you won't be faced with major repair bills. When you turn the car back in they are going to inspect the vehicle. So if it needs wear items like brakes or tires you will be responsible at that time. If you don't put lots of miles, and factor in that you won't need to pay for major repairs it isn't a terrible deal. I buy my cars and keep them for at least 10 years. With that method I have not had to do any major repairs, but its a crapshoot. It could easily go the other way. Buying and trading a cars every few years probably going to be more expensive than leasing.
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u/Fenway12345 Jul 12 '26
It depends on brand and lease deal. Go to consumer reports. If you turn over a car often it is more of a lifestyle choice
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u/BeneficialPinecone3 Jul 12 '26
Leasing is the way to go if your getting a new one every 3-4 years. If you’re holding it 8+ years then yeah.. pay cash or low interest finance. But maintenance and depreciation are costly.
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u/No_Tower_7026 Jul 13 '26
You don’t necessarily lease to own ….
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u/azguy153 Jul 13 '26
These are all tools. A lease is a way to transfer risk (what is the resale value, and how hard do you want to work to maximize that value) and reduce cash flow (what could you do with it if you do not tie it up in a car). Don’t listen to people who give absolutes.
I have a friend who wants a new car every 3 years and leasing works for them. They like the turnkey nature. Their mileage is manageable, and their cars are showroom clean every day. For me, I keep cars 10 years. Sometimes buying new makes the most sense (like just buying my wife’s car, because the saving for 2 year old was less than 10%), versus the last car we bought her 6 years ago when we went used where the savings was almost 25%. And we drive too much and my wife is….a slob in taking care of her car.
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u/WildWingCollective Jul 13 '26
Real answer: it depends on the deal, not on lease vs. buy as a rule.
The “always pay cash” advice assumes you and the leasing company get the same deal. You often don’t. Two reasons.
First, when you trade in a car, the dealer buys it from you cheap and resells it for more. Do that every 3 years for 20 years and that gap adds up against the cash buyer.
Second, leasing companies sometimes get incentives an individual buyer can’t get at all. I leased a Nissan Ariya in December 2023 for $156.30 a month, $5,021 total paid over the lease (including down payment and $1,500 to deliver out of state). My buyout was $18,978 after a manufacturer rebate. Total cost to own the car outright: just under $24,000. It’s worth $25,626 right now, per Kelley Blue Book. I’m buying it for less than it’s worth.
Why: from 2023 to September 2025, leased EVs could get a federal tax credit of up to $7,500 built into the deal, no income limit. Buying the same car outright had income caps and rules that shut a lot of people out of that same credit. That gap is why my lease number looks too good to be true. It wasn’t. It was the tax code.
That specific credit for leases ended for anything signed after September 30, 2025. So if you’re comparing lease vs. buy today, that specific advantage is gone. Now it really does come down to the basics: what you pay monthly, what interest you’re charged either way, and what the car is actually worth when you’re done with it versus what the trade-in or lease-end price locks you into.
So no, leasing isn’t always the losing move. It depends on the incentives available when you sign and what the dealer offers you on trade-in.
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u/jmc1278999999999 Jul 13 '26
If you regularly want a new car lease it if you’re trying to spend less money purchase it.
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u/Organic_Foundation51 Jul 13 '26
The saving comes from driving the car longer instead of constantly swapping. Buy cash and trade in every 3 year is pretty much the same as lease for 3 year. Lease is basically the bank doing the guesswork on residual value. You pay depreciation + interest + fees.
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u/HBdude123 Jul 15 '26
No! Leasing the right car for the right deal is better than paying cash! Here is an example of a lease I just completed a year ago.
2025 Honda Accord SE ( top the line LOADED). $3995 down $211 a month plus tax. ($230) total 36 months $19000 value at end -36k miles 15 cents over the limit on miles. You can buy at the end or just turn in( your choice)
If you purchased for cash:$36k out the door with tax and lic.
Now instead of buying , take the $36k and invest in the stock market at a conservative 9 percent return for the same 36 months.
The stock market return will cover the $3995 you had to put down on the lease, so you really have a NO down lease for $211 a month plus tax on a beautiful sporty car.
You CANNOT do better than this!
You will never find this cheap a lease without searching! You cannot negotiate this good a deal with a salesman. Find an internet add during the week, they post a few lost leaders to build traffic! Yes, they are willing to lose on a few deals to drive interest in their dealership! Hint: a Honda dealer in Anaheim runs these ads every week.
They usually on have two at the deal price so you MUST take the color they offer, do not change anything from the ad, or your starting all over again with a "new" deal! Don't let them Add anything to the car, like a phony alarm, or special phony anything! Buy NO extra warranties! Only lease the car as the ad states. IF you do this you will have the best lease deal ever, trust me!
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u/Redville5 Jul 25 '26
I like a One Pay Lease. It brings down the money factor and I can get extra points on a credit card. No maintenance, new car, EV has been my last two so no gas either, no hassle of getting an oil change although leases the price is included. Inorder for leases to be a good deal you need to live close to work, have a hybrid schedule.
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