Do you lease or own your vehicle?

[scottieking]

I'm curious because it is potential new car time for me. I've always bought but I'm flirting with leasing. Weigh in with your always heady advice, skanks.

[Ms.Huxtable]

Bouche and I have been discussing this very subject lately. I don't know very much about it either but it is my understnading that if you own your own business then there are real tax benefits to leasing. Can anyone confirm?

Our neighbor swears by leasing as well but he is the kind of guy that gets a kick out of having a new car every 4 years. I couldn't care less myself.

[bouche]

me and ms.hux have been thinking about starting up a lease in a year.

We are talking about leasing one of them really efficient car thingies and leave the bouche-mobile in the driveway unless absolutely necessary.

[bouche]

WEIRD!

[bradm]

I did a Google search that turned up some articles that may be of interest.

Aloha,

Brad

[Kaidy Mae]

I've always bought, but it seems that when the wheels start to fall off the old race vans that I never have enough dough to get a new one and send the old one off while it's still in one piece. The past 2 months have been retardedly expensive for maintenance (not to mention parking tickets in the Tdot). Gas being 94.9 today sure doesn't help either. Grrrr!

A friend of mine just leased a new Wave. His payments are under $200/month, but in a 4 year lease he only has 80,000 km. Now that may be fine if you're in London, but way the hell up here that simply won't do.

I'm going to be looking into leasing a hybrid when I find a new job. The Honda Insight is supposed to have the lowest mpg (even lower than the Smart Car), but are impossible to find.

[dave-O]

If you are considering leasing you need to closely examine the allowed km's clause - especially with our concert-seeing, road-tripping nature. I know many people who far exceeded their max. mileage and ended up being forced to buy out the lease at the end.

Ms. Hux - if you are self-employed you can write off portions of your vehicle expenses regardless of owned or leased. I may be wrong, but I don't remember any sort of benefit in that respect to leasing.

[Basher]

dave-O is correct - as far as I am concerned leasing is the way to go every time, unless you will exceed the KM allowance. Basically leasing is a guaranteed buyer waiting for you at the end of the lease term. You save money by only paying taxes and financing on the difference between the purchase price and the buy back.

Remember - you can always decide the buy the vehicle at the end of the lease, so if you will not go over the KM allowance, why make that decision now?

[MoMack]

I think the write off is better and easier for a lease. ie. you don't have to get into capital cost allowance / depreciation stuff...

[dave-O]

Yep, MoMack's right. It's been a while since I've been through the exercise...

[Jaimoe]

I leased-to-own my previous car ( on a 4 year lease ), but when the time came around to buy the car outright, I owed 10 grand. Paying 10 grand for a 4 year-old car is foolhardy, especially since most people don't have 10 grand in cash handy. I would have had to finance the 10 grand and by the time I payed that off, my car would have been not worth much - and I would have been looking for a new car.

So, last summer I decided to trade my lease-to-own car in, and buy/finace a new Mazda 3. I learned that after your lease is up, you are essentially left with nothing. Unless you like new cars every four years, or can write a good portion of you monthly fees off, leasing is not a good idea.

Buy a Mazda 3 or 6 and you will be quite happy.

[PalacePrincess]

i just leased AND bought my car out.

leasing is great, in that your monthly payments are next-to-nothing, many places include roadside assistance for the full term of your lease, and if you get all your maintenance done at the dealership, if, within your lease time, something goes seriously wrong with your car past the usual warranty, they will often extend the warranty to cover it (although the warranty thing may apply if you buy the car too, i'm not sure).

the downfall is that at the end of your lease, you have nothing. i chose to buy my car out because it would have cost me a lot of money to return it due to extra km's and required repairs (i had a dent in my car from someone driving into me in a parking lot). i also chose to buy it because i didn't have money saved up to put a sufficient down payment on a new car, and any used car i would have been able to afford would be worse off than my car. not to mention, your buy out price is usually lower than what you would pay for the exact same car (same year) from a dealer. in my opinion, it's better to buy out your own leased car than buy a used car, because at least you know where your car has been, and what has gone wrong with it since you got it! since i re-financed it, i was also able to have monthly payments that are only $20 more than what i paid on my lease (which was very, very low).

i was also considered self-employed for the majority of the time i was leasing. you are allowed to claim any mileage you use for work (you are supposed to keep a log of this), your gas, car maintenance, and if i remember correctly, i think you can even claim your car and insurance payments (or at least a portion of them). this has nothing to do with whether or not you lease or own, just that you are self employed.

[bouche]

here's our situation. the car is paid off as soon as I get my tax return.

The car is in great shape for touring. This is why the more fuel efficient vehicle will fit in our daily lives fine. Driving to and from work, getting groceries, etc (we can walk to our beer supplier) will be very good on the pocket with our crappy gas prices.

I guess what I'm saying is, if you already OWN a decent car, that's the TOURING MOBILE!

[SaggyBalls]

alright - my father's been a business manager for ages and he swears by quality used automobiles. that's where i get my rides, and to be honest i think that's the best way to go.

if you buy new you'll lose a good 40% by driving it off the lot.

if you own your own business you can write off a lease but you can also write off a percentage of a purchase as well. have you set yourself up as a business? that would be a great first step...claim a bunch of things like a percentage of utilities, 'office supplies'...talk to an accountant if you can because you have some choice options if you can get organized...something i should really look into.

and if you work an entertainment angle into your 'business' you might be able to claim shows and CDs...look into it.

the car dealerships make a bunch more money from leases than from sales...mostly cause they can sell a leased car if the owner doesn't buy out.

you'll have limited kilometres unless you don't mind paying extra at the end of your lease, and if you muck up your car you'll get charged for any ding, scratch and stain on the upholstery. it could be great for you but if you worry about the extra costs you're going to really worry about everything that gets dropped on the carpet or seats...and you're a chill guy so if it's going to change that i'd stay away from a lease.

stock is bought with credit...that's why the automotive industry is so important to the economy. when nobody's buying, no dealerships are borrowing so much and the banks and also the financial sectors are hurt too...all those cars on the lot can be repoed cause they really belong to the bank, so yo umight be able to get some killer deals on buying in the next while - low interest rates, incentives to buy old stock - to move product - means dealerships have borrowed too much and are just looking to break even and get space on the lots.

now here's what i ask you, scottie - why do you want new when you can get a used car with a warranty?

my imperial had its warranty for 14 years - but that was a kickass warranty - had full roadside assistance and everything. but when the warranty was done it didn't take too long for the shocks to go and that meant i had to get a new car or spend more on repairs than a new (to me) car.

secure drive from lion's gate - a division of AIG i think.

if you look into the warranties you can get for quality preowned cars you'll probably find killer scores and save a bunch of money if you're looking to buy.

if it's a budgetary concern i hear KIA is the best deal going. everybody i know that's had one has been happy with them...that's like 3 people but still. cheapest cars around with great financing options.

personally, if i were getting a new car i'd be going a few ways.

hybrid - honda and toyota are the leaders with the smart cars and ford escape hybrid rounding out the tiny 2 seater and small SUV categories respectively

diesel - fuel and engines will last you much longer. on my car i can get about 650 km if i keep it down but the same amount of diesel could probably get me 1100 km...that's efficient but diesel fuel is smellier and takes specific repair facilities. you'll get a lot more life from a diesel engine too. if you like to run your car into the ground this is ideal. plus, with the proper modifications you can run straight biodiesel - make your own fuel from fryer fat. go to the fast food restaurants and take their used shortening...add a couple of things and voila - almost free to you to fill up (time and effort required)...reuse is one of the 3 r's...

bigger cars - i like bigger cars. full sized cars tend to be more reliable and stable on the road. the oldsmobile i'm driving now gets thrown around on its little tires while my imperial was solid and floaty - i felt like a captain on a boat. if you don't care as much about fuel economy and want a bigger ride, don't go for the SUV unless you're in the country. big cars are still not so bad on fuel (remember the big problem isn't weight it's wind resistance) as trucks and SUVs. in fact, my old imperial wasn't really that much worse on gas than my oldsmobile.

i'd say a 20% difference tops and if you like luxury and safety (for yourself at least) then a bigger car (midsize to fullsize) is right up your alley...size is most important in town - the stop and go is the hardest on fuel. if you do a lot of highway driving then the difference between small/midsize and mid/fullsize isn't as noticeable and you might be able to afford youself some more space.

i would suggest the ford five hundred for a bigger car. most room in its class and it's not much bigger than a taurus.

think the same size as bouche's intrepid but way roomy. you can fit 9 sets of golf clubs in the trunk!

you can get them in AWD and with a CVT transmission...no gears to mess with, just one big belt. works like a snowmobole transmission. totally smooth.

not to be a fordmonger but the freestyle is a cool vehicle too. not quite SUV not quite wagon. loads of space and fun to drive.

do you want a wagon?

i like wagons. practical!

you could also get a convertible - i want a convertible scottie - you'd live it. more working parts to eventually break, but that freedom dude...

anyhow, my answer is this: buy used, lease new

[dave-O]

One other thing, I've found in my experiences that salespeople are more willing to move on price on a buy than a lease.

[Im going home Donny]

I saw in Consumers report that Toyota Prius a second gen. gas/electric is going for about $23,000. Not bad. Toyotas after 1989 seem to be gold. Though some of the wagons seem to be buggy.

1990-93s go from about 1500-4000. I drive a 1990 Toyota camry.

The realy great thing about driving such an old car is the insurance is dirt cheap.

...sorry my response doen't have much to do with leasing. I leased once...I doubt I'll do it again unless I have a real solid job and can get a hybrid, otherwise I don't understand paying the crazy insurance rates?

I tottally reccomend you go buy your self the Lemon-ade guide. This book is golden even just for understanding what makes tend to be trustworthy.

Edited April 28, 2005 by Guest

[AdamH]

I have a 95 Corolla, 180K Kms so basically I'm driving it into the grou.d I'm very happy with it too, Last year I spent $130 on Oil Changes and minor repairs.

When it comes time for a new one I will probably finance/buy as I'm not self-employed, and would consider financing from the dealer rather than a loan because their rates are more competitive than banks. When buying you can work your price down outright, or negotiate waiving the fees (transport, freight, etc). The "freight charge" is essentially a nothing-charge that a sales rep uses as a margin. Honestly, you're not paying for anything when you pay for freight.

[RayRay]

I bought my car used (it had been leased), we are pretty hard on vehicles and are big fans of long road trips so owning our vehicle was a must. We have a Nissan Sentra and man can that thing take a beating. The only major repairs we have had have been when my boyfriend forgets that our little car is not a 4-wheel drive SUV and took it off roading in Thunder Bay or tried to drive over a 3 foot snowbank instead of shoveling. I don't think that I could lease anything, I like the idea of having something concrete at the end of four years of payments. Good luck with your decision.

[Basher]

I really don't understand the "nothing at the end of the lease" arguement. Let's illustrate the point with math:

Car is 25,000

Finance:

25,000 plus taxes, spread out over 5 years or payments. At the end of the 5 years, what you have left is a car that is 5 years old.

Lease:

25,000 minus 10,000 buy back (for example). Finance 15,000 over 4 years. At the end of the 4 years you have a card worth an absolute minimum of 10,000, and a buyer waiting.

Now, if you want to keep your car at the end of the lease, you can either cut a cheque for the ten grand, or finance that.

The whole point to me is that a lease and finance are indentical, except for the fact that with a lease you have a GUARANTEED buyer at a specific time.

Of course, if you can afford to finance the car now, and you plan on keeping it for more than 4 years, go ahead and do it! Sure, the price you pay and finance rate you get will likely beat the lease.

The real question is, what can you afford? Most people I know choose to lease because they couldn't swing the monthly payments on a purchase.

[Basher]

And one more point:

Often times you can sell the car at the end of your lease for MORE than what the buy back was (if you kept it in great condition). The surplus money is yours, which you can use as a down payment on your next car.

[CyberHippie]

Personally I'd go with newer used car with low KM's. You save a ton of money that way. Just make sure you pay extra and get a warranty that way you are covered. For payment get yourself a line of credit from the bank, this is the lowest interest way to pay for your car. With a line of credit you will be required to make minimum monthly payments, but you can add as much extra as you want to chip away at it.

[SaggyBalls]

longer trips are easier on cars. the engine gets to optimum temperatures and will do less damage on your car than a lower amount of city kilometres.

nice to see another used car driver or 2 are kicking round these parts

[timouse]

mileage is the killer in a lease. if you think you'll be under the limit and are self emplyed then you may very well net out leasing.

talk to a tax guy/accountant. we have a guy that we've been going to for years, when the last car came up he did some math for us and showed us that buying waqs the way to go. your mileage may vary

[MoMack]

Some good advice (some not as good).

I think what people have to remember is a) depreciation is very make/model dependent. You do not lose much driving a Honda off the lot. Buying a 1 year old honda is not much savings at all. when you buy a hybrid, don't expect to save any money. Sure the daily costs are less, but you have to drive it for years and years and years to have it even out with the extra price. Buy a hybrid for the environment.

For a good lease deal check out leasebusters.ca You can get someone else to give you money to take over their leaes. If you find one with a big down payment it can be a real good deal.

Also, there are groups (e.g. CAA, but many others) that will give you dealer cost on cars so that you know what it is when you go negotiate. Do this... if I can remember some of the websites I'll post them later.

Go for the Accord Hybrid. Or wait for the 2006 Lexus R400 Hybrid. Awesome cars!

[MamaPink]

I bought my car solely because i knew i would exceed the KM's allotted in a lease. (and i have, by a ridiculous amount) But I gotta say Toyotas are the best cars to own... i've had mine for 4 years and I've never had any work done on it. (except for a new fan belt that cost pennies to replace) And not to mention, they are fantastic on gas and their re-sale value is probably the best out of any cars.

i love my car