Buying or leasing a car

General Discussion
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I am currently in a lease in the car that I am driving. The only issue that I am having is that I put some major miles on my car. I was only allowed 12,000 per year and I have averaged roughly 22,000 miles in the just 2 years that I have had it. It was brand new and only had 22 miles when I got it and now its up over 47,000 miles. I travel back and forth to work 31 miles one way (62 round trip) plus the same town where I work is where my son goes for his therapies and doctors visits that he has. I have less than a year and want to know which is better to do? Lease or out right buy? I currently have a Car Doc warranty where all oil changes, and tire rotations are free while I have the car, but the dealer is another 62 miles one way to have that done…wanting an outsiders opinion of what I should do.

Thank you

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I would check into interest rates for buying cars to start. Generally speaking, it’s cheaper (interest-wise) to buy a new car. Total dollar amount, of course used cars are usually cheaper.

My dad always told me never to buy my own lease, because I would likely end up paying way more than if I had bought it outright from the beginning.

There are a number of ways to save money on a new car, ranging from when to buy to what you buy (source: I work for an automotive OEM). There are often a lot of discounts available that people don’t realize, and you can often get 0% APR depending on your credit (no, it DOESN’T have to be near perfect) and other factors (source: personal experience).

Ultimately you need to decide what fits your budget. I use to only buy pre-owned cars, but when I bought my house I significantly cut my housing expenses, so decided to purchase a brand new vehicle (peace of mind of warranty, and having more confidence in having a vehicle that would get me to work consistently so I didn’t lose my job, home, etc).

If you think you will continuously go over your miles, leasing may not be the way to go, no matter the monthly price of your lease.

Hopefully this helped at least a little!

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Buying out your lease might make sense because you will avoid paying the overage on the miles and the disposition fee of turning the car in (if you don’t lease again) – but double-check the residual value in your contract and then run your car value through Kelly’s Blue Book to compare. The residual value is that fixed amount that the leasing company will not budge on for a buy out – it is non-negotiable. Once you have that figure you can see how it compares to the car’s actual worth. Also, then you can run the numbers on what your loan payments will be based on the amount you need to finance and your credit score and term. (I’ve bought out a lease, as you probably can tell…so I’m happy to help if you have more questions!)

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Karen Marie posted:

There are a number of ways to save money on a new car, ranging from when to buy to what you buy (source: I work for an automotive OEM). There are often a lot of discounts available that people don’t realize, and you can often get 0% APR depending on your credit (no, it DOESN’T have to be near perfect) and other factors (source: personal experience).

Karen Marie,

Above you mentioned that there are ways to save money on a new car…from when to buy to what I buy. I know what Brand I am wanting and roughly what model, but when to buy is what I am wanting to know…where can I find this information? As well as the 0% APR. That would be a great rate to have, but again when does this happen?

You have helped tremendously, just need little more information please and thank you

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Theordora,

If I understand correctly, my residual value is only like 3-4 grand but I’m sure the worth is way more than that. At least 10-15 thousand. I haven’t checked the KBB yet, but I will just so I have a more accurate value of my car. I love my car, don’t get me wrong but I am seriously thinking of trading it in towards a newer model and buying outright is all. The payment amounts would definitely go up at least a 150 bucks though. I can afford it, but I am wanting to know which is better? Especially since I love to just go so much lol. Which is not good when you are leasing a car.

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Generally speaking, the best time to buy a new car and get advantage of as any discounts as possible is toward the end of the year. For example, I bought my car at the end of the year, just before Christmas. I did not purchase the most recent “version” of the car. This was at the end of 2015, and dealerships were trying to get the “old” 2015 stock off the lot, so I saved a ton of money by getting a 2015 instead of a 2016. It also opened me up to getting 0% APR financing, since they just wanted to sell the car and get it off the lot before year end.

Keep in mind, I work for a US OEM, so I cannot guarantee that any of the “foreign” automakers do the same, but I would honestly be surprised if they didn’t.

Another thing I forgot to mention is that there are often “loyalty” discounts… let’s say you’re leasing a Jeep. You might be able to get or negotiate a loyalty discount by buying a Jeep (or some other vehicle from FCA). Similarly, sometimes you can negotiate an early trade in for a lease if you’re getting too close to going over your miles, but there are sometimes timing restrictions on this sort of thing.

Go in knowing more or less exactly what you want, and be sure to tell them that. If they try to push you into something else, just say “No thank you, I have done my research, this is what I want.” If they don’t listen, leave. There are thousands of dealerships and salespeople who will respect what you want, simply because they want you to refer them to others.

Let me know if you need any more information! One other tip: shop around. Just because one dealer won’t give you a deal, doesn’t mean another won’t. Each dealership is individually owned, and not controlled by the OEM, so it is solely up to the dealership whether or not they give you deals/discounts!

Finally, don’t let them put that license plate frame on the back without forcing them to give you another discount for advertising for them! Sure, you can always take it off later, but use any and every tool you can to negotiate as much of a discount as you can! (Don’t use this until you are ready to sign though! You don’t want it to mess with the rest of the deals you are likely getting.)

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@amber.hurd Certified pre-owned cars from the dealers can offer a great buy for cars with low mileage. In many instances, they will have cars that have only been used for test drives and are like new for a substantial savings in comparison to new car sticker pricing.