Eddie ONeill

Trying to work out if I should lease or buy a car. Moving to Houston, Texas in a few months. I read somewhere that leasing in Texas was expensive.

Any views greatly appreciated.

Best Regards
Eddie

Mummy in the foothills

Buy.
Leasing is a mugs game unless you are a big company and do it for some sort of tax reason.

HarryTheSpider

Or you can't afford to buy in the first instance.

Leasing a car is not the cheapest way to get wheels in the US.

We leased a car for the following reasons...

1 - Wanted a new car, reliable, with warranty etc, so that chance of breakdown reduced, and if it did breakdown, it's covered.
2 - Wanted a means to build credit history - lease car does this - similar to car loan in some respects.
3 - With an L1 visa, maximum lease period or car loan period would be 3 years. For a loan, needed to put down 20% deposit and pay off loan before L1 visa ran out - extension period on L1 - an extra 2 yrs - would not be taken in to account. We didn't have the 20% deposit to put down - cash was needed for other things. So monthly outgoings for us, with a loan, were nearly double the outgoings with the lease arrangement and a minimum deposit for lease of $1K. We simply could not service that kind of loan comfortably.
4 - Needed to have things arranged so that when we arrived, everything was in place - we arranged things through International Autolease(?) via AIG Inbound programme. They also (AIG) arranged bank, credit card, insurance etc. in advance - nice.
5 - Several people, USC and expats, told us to stay away from US-built cars if fuel economy and/or overall safety was high on our list - which it was and is - rightly or wrongly. It's amazing how many USC drive non US cars... They also told us buying second hand, if you're not familiar with things, can be tricky if time is short...

So if your primary criteria is cost of ownership, then avoid lease...

Our primary criteria is anything but...

I'd think carefully about your requirements, criteria etc before making a quick decision based on generalisations.

Our next car will be one we buy outright, probably second hand, if that market returns to some normality - the cash for clunkers programme took quite a few good second hand cars off the road - environmentally friendly it was not!!

Cheers

HTS

Bob

Buy.

Leasing in the US is generally a mugs game. Only lease if you live near work and won't be driving, anywhere, or you know you'll be leaving the US within a year...or if you're able to blag the travel expense on the taxes, which is harder to do these days.

Also, when you buy, you can get a loan for it which is one of your best ways of getting easy credit to build up your US credit score and history.

A lease doesn't build up your US credit history, you only get reports of late payments, so it only dings it in the negative, but never in the positive for being a good customer.

Plus the way people drive and park, chances are it'll get a bumper scuff and then you'd be in for hell come time to hand the car back...plus unless you negotiate a larger mileage allowance, thus a higher payment, it'll be really easy to blow through your allowance and then have say 30c a mile. Considering you can blow through 15K miles a year going nowhere and doing nothing, it's something to think about.

scrubbedexpat099

Buy

Leasing is for the mathematically challenged.

mikec81

As for leasing being a mugs game, that's definitely a generalization. We put a lot of thought into whether to lease or buy, and it completely depends on your situation. Monthly payments, credit score, down payment, miles per year, all need to be factored in. Buying is obviously beneficial if you have either the money to buy outright, a great credit score, or you are looking for a long term commitment to the vehicle, bu unfortunately not all us mugs have those.

Personally, we got a great reliable leased car, for a monthly payment significantly lower than a loan repayment, with a low down payment, 15,000 miles per year, an option to buy at the end of the lease at a decent "profit" and a full maintenance package for the term of the lease. Sure, I won't own the vehicle, but for the monthly amount I have paid, that is understandable.

Bob

Buying a brand new car is also a mugs game tbh...best bet is a 2-3 year old car that's still in warranty...will be cheap as chips to buy and insure and the loan payment will help build your credit history.

cranston

I vote buy.

I agree with the 3 year old car suggestion. There is a huge selection of used cars in Houston. Checkout cars.com.

JAJ

What actually happens when you lease a car? The dealer sells it to the leasing company. You pay the leasing company for X years, return the car to them at the end of the lease, and they then sell it. The payments you make, plus the sale value at the end of the lease period, comprises their revenue source and they 100% will make a profit. Otherwise they go out of business.

There are these leases where you have an "option" to buy the car at a specific future price. You always pay more for one of these than you would for a lease without such option.

Many focus on monthly payment, but what you really have to do is look at what the monthly payment represents. There is a difference between a monthly payment that's effectively car rental and one that is paying back capital on a loan.

If you look at leasing as a finance option it usually does not compare well to getting a loan and paying cash for the vehicle. And if leasing is the only way you think you can afford a new car, you should be looking at used cars.

katybluewater

That was exactly our reasons for Leasing too. Our lease is up next month, and we will also be buying a second hand car . Leasing is definitely much more expensive, but some of us do not have any other option

Rete

Just be sure the warranty is transferrable. In addition, not all cars have a warranty pass the 3 yr mark or 50,000 miles. Although quite a few do have the 10 yr/100,000 mile warranty now.

Bob

Those those folks that can't afford new top end and thinking of the lease are probably looking at the higher end gubbins and getting the "certified pre-owned" rubbish, who do continue the warranties.

Though if I were fresh off the boat, I'd probably just suck it up and get a Kia or Hyundai, second hand for a couple years and build up credit and have decent warranties. Who cares about the Jones.

Englishman43

Buy.

Buy what you can afford.

Buy anything rather than leasing.

SpoogleDrummer

That depends on the interest rate and deal available. Many new cars can be bought with 0% financing and various discounts. The certified one owner thing also seems to add to the resale value.

Bob

though how much are you losing in depreciation? More than the 0% finance brings you.

Unless you're keeping the car till it meets the junkers yard...flogging it in a few years isn't worth it...