With rates so high…lease or purchase?

[Zoe Saldana]

I have about 9K in positive equity in my current vehicle so I’m debating a used 2020 with 43K miles for $39,500 or buying/leasing a new one. If I lease that 9K is gone in 3 years if I put it all down. I could put some down and save the rest. If I buy new, even if I put all 9K into it plus some more cash I’m still left with a big car note. Thoughts? Trying to be smart here, but definitely want to unload our current vehicle as we’re concerned about reliability (2018 Durango GT that has been giving us some issues.) Thanks!

SMART is keeping your current truck and driving it until the wheels fall off!

Fix the issues with the Durango!

 

[1stindoor]

That was always my rule of thumb growing up...drive it 'til the wheels fall off. The problem with that thought process is the "rude" sticker shock you get when you finally decide to buy a new truck. Now I usually trade about every 5-6 years or 125-150k miles. I just bought my 2023, traded my 2018 (119k). Cost diffference was about $200 to my monthly payment, but mostly because I chose "nicer" features this time around, and the interest rates are ugly.

 

[wrigley]

Lease has the same interest rate baked in that a purchase does. A purchase can be refinanced when/if rates go down, a lease cannot. You build no equity with a lease, purchase you do. Trading in a purchased vehicle yields tax credit, leases do not.

Plus leasing normally has higher insurance premiums since you must carry the maximum protection rates available.

Mike

 

[Tulecreeper]

That was always my rule of thumb growing up...drive it 'til the wheels fall off. The problem with that thought process is the "rude" sticker shock you get when you finally decide to buy a new truck. Now I usually trade about every 5-6 years or 125-150k miles. I just bought my 2023, traded my 2018 (119k). Cost diffference was about $200 to my monthly payment, but mostly because I chose "nicer" features this time around, and the interest rates are ugly.

True, to a point. I drove my last truck - a 2000 Silverado 1500 4x4 - for over 23 years until this year when I sold it and bought my RAM. All those years of not having a truck payment certainly gave me the opportunity to put away enough money to just buy this truck outright if I had wanted. Instead, I put 50% down, paid for 6 months, then just paid it off.

 

[1stindoor]

Good point. I have a bass boat habit...if I didn't have a truck payment, I'd have a new bass boat payment. As it is sometimes I have both!

 

[turkeybird56]

Unless I owned a bizness where I needed a fleet, and depreciation payment credits, and and, I WOULD neva lease. Like renting: U R paying somebodies else's bills and get nothing in return. Just my opinion, but than I's a BOIRD.

 

[turkeybird56]

Good point. I have a bass boat habit...if I didn't have a truck payment, I'd have a new bass boat payment. As it is sometimes I have both!

BOIRD really wants to get a New Honda Wing Trike. But the only place to get is DFW, and the new ones are 55K before financing, ahhhhh, no, lmao.

 

[Tulecreeper]

Good point. I have a bass boat habit...if I didn't have a truck payment, I'd have a new bass boat payment. As it is sometimes I have both!

Me, too. I just sold my Ranger because I got tired of going by myself all the time. I may eventually get another one.

 

[1stindoor]

I have a Nitro Z21. It'll probably be my last "big" boat.

 

[Tulecreeper]

I have a Nitro Z21. It'll probably be my last "big" boat.

I think if I get another one it will be a step down. Maybe a 16-footer with just a 40 on the back. I don't fish tournaments anymore - again, because I haven't been able to find anyone lately who is interested - so there really is no point in maintaining a large, expensive hole in the water anymore.

 

[TestPilot57]

A friend of mine finally (after nearly 2 years) got his new fishing boat. But it's not a bass boat. A Lindell 42. He'll use it mostly for diving, including "fishing" for scallops.

 

[Ecosqueasl]

Buying a vehicle is dead expense, it will never come back. Your 9k will go a long way in fixing your Durango if you have a reasonable mechanic. The other option is trade it down for a slightly older pickup or newer with high miles.
Just what I would do

 

[GTyankee]

If you have a Business, Leasing can be worth while

Out here in California, you will see people like my ex boss in the Construction Field, he always leased a large 4 door car, because he drove Contractors & Bidders out to job sites, he leased the Vehicles out of Arizona, because it was much cheaper than California

 

[dbr7]

I have about 9K in positive equity in my current vehicle so I’m debating a used 2020 with 43K miles for $39,500 or buying/leasing a new one. If I lease that 9K is gone in 3 years if I put it all down. I could put some down and save the rest. If I buy new, even if I put all 9K into it plus some more cash I’m still left with a big car note. Thoughts? Trying to be smart here, but definitely want to unload our current vehicle as we’re concerned about reliability (2018 Durango GT that has been giving us some issues.) Thanks!

Think about you annual mileage, 3 year lookout financially, vehicle-wise and vacations.

I thought I would never lease or have a car payment. Being a wrench I thought I would buy used forever. I'm a healthy 54, I ride a Harley most of the summer and just bought a house. I needed a truck and decided to lease when we spent a pretty buck on a unplanned metal roof. This set me back $300/month so I decided to lease. I got a beautiful green Warlock for $45k at $380 Month $4000 down. 10,000/year. I also did a lease because I was thinking at the time that I want a Gladiator manual (wasn't available due to COVID shortages).

As much as I don't want a payment, I have peace of mind that I can load up the trailer and go camping anywhere without a worry of breakdown. I also stared off jobs and landscaping so again, peace of mind. I only put 8500 a year on it and I think this will work out great as a keeper because :

-I ride the motorcycle in the Summer so mileage even after paying the balloon will be low.
-We rent big sedans for long non-camping trips
-I need a big truck
-Peace of mind overrides the payment worry
-Fun odd jobs pay for the truck

Just consider everything. Lease, buy , keep the oldie, bus, uber/Lyft are all options but the best choice follows the most thought out plan.

 

[dbr7]

Buying a vehicle is dead expense, it will never come back. Your 9k will go a long way in fixing your Durango if you have a reasonable mechanic. The other option is trade it down for a slightly older pickup or newer with high miles.
Just what I would do

I wish it was this easy in the Northeast. Rust usually beats us out from spending that 9k as it corrodes many vehicles beyond welding patch repair.

 

[Zoe Saldana]

Think about you annual mileage, 3 year lookout financially, vehicle-wise and vacations.

I thought I would never lease or have a car payment. Being a wrench I thought I would buy used forever. I'm a healthy 54, I ride a Harley most of the summer and just bought a house. I needed a truck and decided to lease when we spent a pretty buck on a unplanned metal roof. This set me back $300/month so I decided to lease. I got a beautiful green Warlock for $45k at $380 Month $4000 down. 10,000/year. I also did a lease because I was thinking at the time that I want a Gladiator manual (wasn't available due to COVID shortages).

As much as I don't want a payment, I have peace of mind that I can load up the trailer and go camping anywhere without a worry of breakdown. I also stared off jobs and landscaping so again, peace of mind. I only put 8500 a year on it and I think this will work out great as a keeper because :

-I ride the motorcycle in the Summer so mileage even after paying the balloon will be low.
-We rent big sedans for long non-camping trips
-I need a big truck
-Peace of mind overrides the payment worry
-Fun odd jobs pay for the truck

Just consider everything. Lease, buy , keep the oldie, bus, uber/Lyft are all options but the best choice follows the most thought out plan.

You forgot about the mileage limits, damage costs, and purchase price. There are many factors in the decision.
Here is a also a calculator. https://www.calculator.net/auto-loa...t=0&ctype=standard&x=Calculate#autoloanresult