Should I Lease or Buy?
lease-vs-buy
This debate probably has more questions than answers. Since this blog is devoted to leasing cars, I think it makes sense for me to weigh in on the topic. My answer on whether it is better to lease assumes two things:
One: you have a decent credit rating
Two: you drive 12,000 miles or less per year.
If you don’t meet either of these two criteria, buying is the better option. Assuming you do meet these criteria, is it better to lease or buy a car?
The Bias Against Car Leasing
As I touched upon on in, Car Leasing Myths, there seems to be a bias against those who lease cars, as opposed to buying them. Those who lease cars are often portrayed by car buyers as being impulsive, greedy and fool-hardy with their money, while they prop themselves up as being financially mature, patient and smart with their money. Those who lease tend to be more secure, confident, but quiet in their ways. The non-lease crowd tends to have a spiteful outlook upon those who lease or refuse to pay cash for luxury items. This is also clearly the mindset of many of our so-called, ‘financial experts’, such as Suze Orman, and her overly critical view that, ‘if you cannot afford it, don’t buy it’ http://biz.yahoo.com/pfg/e16buylease/.
If You Can't Afford it, Lease It
Personally, I am not about to let Suze Orman’s lack of appreciation for new cars guide what’s best for me, and neither should you. More importantly, her reasoning is illogical and foolish. She says, we shouldn’t buy something we cannot afford. That is precisely why we lease cars, Suze. Leasing makes cars affordable. The reason I lease a car is so I can make a low monthly payment that I can afford. I could just as easily choose a car purchase that I cannot afford as a much as I could choose a car lease payment that is outside of my realm. Leasing a car with an affordable monthly car payment is no different than buying one. We should only buy or lease what we can afford, either way. Furthermore, I wonder if Suze Orman has considered the safety and liability issues of older or inferior cars. Old cars are not only a liability for financial reasons, but for safety and security too. Let’s face it, there is a reason the majority of cars only have a 36 month warranty. They become a repair, security and risk factor. Your car becomes a liability after five years, not just for repair concerns, but for safety and security. Nobody wants to be broken down on the road, particularly at night. If leasing, allow you to upgrade to a bigger car with more air-bags and a higher crash rating, you are making good practical, as well as financial sense. Older cars are simply not as reliable. That doesn’t mean you cannot get a good deal on a five year old car, it just means it’s past the age where you can compare your investment fairly to a new car with warranty. Oil Baron, John Paul Getty has been quoted saying this thousands of time, yet for miserly codgers like Suze Orman, let me state it again: “If it appreciates, buy it. If it depreciates rent it.” John Paul Getty (words to live by). Why? Read the rest of this entry »
