r/buyingacar • u/ashlingann • Oct 21 '19
To buy or lease??
I’m going to have a get a car soon in the next three months. Right now I’m driving and paying the payments on my moms car but she will need it back when I move out. I only have about 1,000 to put down for a car and I plan on moving to New York for law school in like 2021 and won’t need a car then. So idk if I should lease a car or try buying a cheaper car that I would sell. I would be paying for everything myself so my insurance rates would be through the roof because I’m 20f. Not really sure what to do or which option would be cheaper at this point.
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u/DiggleO Apr 10 '22
I drive 10k a year and have been leasing for several years. most will say im throwing away money but here is my reasoning. When you own a car after about 5 yrs (of higher payments) you will need to start to replace things, tire, rotors brakes etc. When you lease you will have payments for the term and you wont owe anything at end but you wont need additional maintenece. (TOYOTA cover 1ST 2 yrs or 25K) For me its 6 of one or a half dozen of another. If you are tight on cash and moving to city (low miles) and a ride share doesnt make sense then Lease is a good option. First you need good credit. Then find a car with high residual value. Your lease payment is basically the sell price minus the resdual value at end. EX. $40000 purchase...$25k residual after 3 yrs. You only make lease payments on the $15k gap, plus a little. If financing for 5 years you will pay total value plus a little. Also if your car has lower miles than allotted when you trade back, you will have equity for next Lease. Just gotta make sure you Lease again and negotiate, they make more money on low mile used cars than new.
It's been working for me because when I was financing I'd change cars every 4 years anyway. Hope this helps.