An article on Yahoo.com by Sean Tucker of the U.S. News, talks about whether people these days should be buying new vehicles or leasing them instead.  He made several really good points that I’ll tell you about. 

1.  He explains that the new 2009 models have been in the design process since about 2005 or 2006, so they are not the fuel-efficient cars that everyone these days are looking for. The 2010 and 2011 models that are being designed currently are the cars to have. Therefore, with this said, you don’t want to buy a 2009 and then have to pay on it for at least 5 years (average new car loans are at least 62 months.)  That would mean that you would still have this model and be just finishing paying it in 2014.  By then, you could have had a much more fuel-efficient car for several years if you had leased. If you leased a car today, your lease would probably be up in about late 2011, just when the new fuel-efficient models will be available.

2.  Cars depreciate in value a lot, but if you lease a car you really don’t care about the depreciation, because that isn’t your problem, it’s the dealers headache instead.

3.  Leasing may not be available for much longer. Chrysler has already said goodbye to leasing and GM is thinking about it as well. Leasing isn’t making car companies any money, so they are doing away with it.  Depreciation is a big factor. Ford hasn’t stopped leasing to customers, but they upped the prices of leases so that it wouldn’t be a smart move financially for people to lease.  Foreign automakers are still seeing profits with leasing and are continuing to do so. 

One downfall of leasing is the miles.  You are restricted on mileage yearly, so if you drive a lot, leasing is not for you. Another problem is that you always have a car payment, and nothing to show for it. At least if you buy a car, when you finish paying for it, you own it. 

The article definitely leans towards leasing being the way to go currently.  I’ve done both, and personally I liked leasing, because you get a new car more often…..just a personal choice.

      

This entry was posted on Thursday, October 30th, 2008 at 7:17 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.