To Buy or to Lease a Car?
Here are reasons to avoid car leases, starting with the costs.
Sept. 20, 2010— -- I've always been against leasing cars because it's like renting a car for several years, paying a bunch of money for the privilege ... and then having to return it with nothing to show for your money. I've lectured and droned about leasing before but recently I heard some fresh arguments against leasing that have gotten me all fired up again.
Barbara Terry, an off-road race car driver and author of a new book, "How Athletes Roll," about what kinds of cars big-name athletes drive, makes some old and some new arguments against leasing.
Among them:
So that's where Terry and I come down on the question of leasing versus buying. But if you're going to defy us and lease a car anyway, here's some critical advice: Negotiate the price of the vehicle as you would with a purchase and then reveal that you want to lease it.
The monthly lease payment is then based on this price. It's not some random number the dealer dreams up. Most people just go with the dealer's price when they lease. If you hate haggling, the fact that you can do a better deal may not be welcome news. But think of it this way: You could end up paying less than the $299 a month advertised on TV. Monthly lease payments are calculated lots of different ways, but here's a simplified formula: You take the car's purchase price, minus what it will be worth at the end of the lease and divide by the number of months. Now here's more leasing lingo you'll need to know if you're going to "disobey" me.
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