I still can’t figure out if I should buy or lease a new car. I’m so confused by all these articles I read, can you break it down for me?
Yes Sarah, I can break it down fairly simply, I think. There are a few things that you need to take into account when buying or leasing a new car.
How many miles will I put on it? Leased cars come with a maximum amount of miles that you can drive it (10-12k a year is standard). If you go over, you’ll have to pay extra, and by extra I mean about $.15-.25 per mile. You can end up paying as much as $250. for each 1k miles you go over, which is very easy to do.
What kind of shape will I keep it in? When you return a leased car, it must be in the same perfect condition that you bought it in, if keeping it that way is going to be difficult then don’t lease. You will be responsible to fix it back up before you return it and that can be a very expensive proposition. Most dealerships offer a “ding protection” package for a fee, I’m not a big fan of laying out money for protection that you may or may not need. You might have much more than a “ding” that they don’t want to cover later.
Can I afford to have a new car every few years? After the lease time is over you will be returning the car. There’s usually a return fee and a few other fees to pay. You’ll be starting all over again with the fees that usually get paid up front, taxes etc. It’s true sometimes those get rolled into the lease amount, but you’re still paying them.
Do I even a need a NEW car? I’m not convinced you do but that’s you’re personal choice. I ALWAYS tell my customer’s to buy one that’s a year or 2 old and just come off of a lease and still in mint condition. You can save a ton of money and basically still have a new car. That’s just my opinion, you’ll do what want. But let me remind you, 1 or 2 year old cars still retain some of that new car smell and let’s face it, we all love that smell!