What's your opinion on buying a fairly new car versus leasing a new car?

I just rented a Pontiac G6 for a company meeting and I really liked it. My current vehicle is pretty undesirable, especially compared to a new vehicle. Is it reasonable to lease a vehicle for a few years and then reassess whether to lease again or try to buy a vehicle. How much can I expect to pay monthly for a new or fairly new (2005-2007) vehicle and how much can I expect to pay monthly to lease a 2005-2007 vehicle? Let's assume that the Pontiac G6 is my first choice and that it's priced around $20,000. Thanks!

What's your opinion on buying a fairly new car versus leasing a new car?
Lease vs Purchase:


these two methods are completely different... a lease is based off of a residual value (average depreciation), supplied by a third party publication. The resale value of the vehicle has a huge effect on wether or not leasing is a good idea.Let me explain, When you lease a vehicle, you are actually paying for the depreciation of that vehicle, the manufacturer is giving you a garaunteed value of the vehicle so long as the requirements of the lease are met (mileage, maint etc), the usage charge is based off of a money factor, (the cost of money for the manufacturer) this is in NO WAY related to an APR.Let me give you an example; the resale value of a honda civic over three years, given the vehicle has been properly serviced and maintained and the miles are not over the limit(avg of 12,000 per year), would be higher than that of a ford focus under the same circumstances. Thus the cost of using the civic over three years is less , so your payment is less. Manufacturers like leases because it brings you back into the dealership in 3-4 years. If you are seriously considering a lease, make sure you are aware that there are NO tax breaks on leasing a vehicle, in fact, some counties will charge you a propery tax on a lease at the end of each year......it should be on avg @ 2.5%-3% of the blue book value of the car.


here are some basic numbers on a lease.....


$20,000 = @ $329 / mo required down= 1st and last payment, ttl, and security deposit totaling $2558 due at signing.


A purchase is much more simple and direct. Purchasing a newer model pre-owned vehicle with low miles is not a bad idea... because the vehicle has already taken its initial depreciation hit from the showroom floor......avg depretiation hit from initial purchase is approx 20% give or take. On your $20,000 vehicle, that would = $4000. So lets assume this:


you buy a one year old vehicle with low miles, it has taken its initial depreciation of $4,000 and you are able to purchase it for $12,900.given that your credit rating is acceptable, you finance the vehicle for an avg term of 60 months..... you put the same amount down that was required at lease signing of $2558 ,


and there you go , your monthly payment on avge is $227, and you own the car at the end of your term..... I hope this helps more than it confuses you....
Reply:No one can give you a real payment. It could be 200 a month or it could be 800 a month. Just depends on the exact car, your credit score, money down, miles you need, length of term, etc. You would have to contact a leasing agent to really get a good payment. The G6 has a fairly low residual value, which is in turn going to negatively affect the payment. Leasing is a good option and will prob. be cheaper than buying if the lease is structured right for your needs. Good Luck.
Reply:I don't have too much advice but I do know that the payments you would make would be based on your credit. I also have an opinion but it's just an opinion. I think buying is better than leasing. Sorry if this doesn't really help but hopefully it will clear things up just a little bit.
Reply:The cost of leasing during the lease period is equivelent to 14% interest. You are really "renting" the car, not buying it outright. Too many restrictions on milage, insurance, accidents, condition upon return (very subjective), etc. The only benefit is more car for the payment, but the restrictions outweight the benefits.





You are better off to buy a 2+ year old vehicle with 25 to 35 k miles. Pay cash if you can or pay off the loan as fast a possible. The older the car, the better the price due to someone else taking the depreciation hit.





Don't let emotion enter into your buying decision. Remember, a car is like a hammer - a tool - used to get from one place to another. And do your research as many private sales in areas of the country right now are making good deals on used vehicles to get rid of them!





The price of a $20,000 loan is about $500 a month for just the car, not with insurance. A lease would be about $300 for just the car. But you don't have anything at the end of the payments. It only benefits you personally if you can write off the lease payments on your taxes.
Reply:It sounds like you use your vehicle for company business. If you do leasing may be the better choice.


The cars will cost the same basic price no matter if you lease, finance, or pay cash.


As for monthly payments, that depends on the interest rate, length of finacing or lease. and how much you put down.


if you financed 20K over 36months @ 6% and you put 3K down your payments would be around $540.00 pm. and after 3 years the car is yours.


If you leased the same car for 36months, you have options. You can put less money down $500. and your monthly payments could be $250. pm. but at the end of 36 mths you would still have a balance owing called a buyout. ie:$8500.00


At the end of 36m you have 4 options. Refinance, pay it off, trade it in, or return the car.


Your lease payments can be claimed on your taxes.


Leasing allows you to have a new car, with small monthly payments, and little or no money down. And trade ins are taken as a downpayment. Leasing works for people who want a new car every couple of years. Some draw backs. they limited the mileage you can put on the car to 20K per year. (that is considered normal ) Consider a 2006 G6 as dealers are given factory rebates to sell them. dealers will give you a better price than a 2007. You can lease used cars also but nothing older than 3-4 years. (get a new one)


I worked at a Pontiac dealer in sales. I recommend leasing a new 2006 G6. If your Pontiac dealer doesn't have any left. He may be able to locate one for you.
Reply:Generally speaking, leasing is a bad idea. You pay for a car for 3 or 4 years, and after all that, you have nothing. If you had just paid a little bit more each month, you could have purchased the car.





There are situations where leasing makes sense, but for the average consumer, it's very, very bad. Why do you think so many car companies advertise lease rates so heavily? It's a great deal for the car company.
Reply:i used to lease my cars, but then i decided to buy one. it's so much better - no car payments, the insurance is MUCH lower, and you don't have to worry about damage. The advantage to leasing is that you don't need to worry about mechanical problems - but that's only if they are covered. for me, i've had to replace a couple of things on my car, but it was a couple of hundred dollars once %26amp; i looked at it as being better then a car payment.
Reply:leasing a car has it's limits concerning mileage and wear and tear.You signed and responsible for the maint.Buying a good used car just means your monthly payment is what you'll end up with.So for myself I'd rather buy than lease.
Reply:Also, you tend to get caught in a cycle if you lease. Cuz, if you go over the mileage they will dismiss it if you get another lease. But it is fun to have a NEW car every 3-4 years.

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