New truck time, buy vs lease. Please discuss

I am old school when it comes to buying a new vehicle and as such have always purchased instead of leasing.

I am asking for pros & cons from those in the know on the above mentioned options before taking delivery on a new truck.

Please discuss and thanks :thumbsup:.

If you will keep it after it is payed for, then buy. If you don't drive much and you won't tear it up and you would never drive a truck more than 5 years old, lease one. It also depends on where you live, and the conditions where you live.

what will cost you less at the end of the day?

if you save a lot by paying cash, buy it.

if you are getting a lower interest rate than your money will be making sitting in the bank... lease/finance it.

I have always purchased and never leased for the main reason that I never put a lot of miles on my cars or trucks and I would be just giving back a car that I have nothing to show for. At least when you buy a car and keep it till its paid off then you have a nice down payment on a new car using the other car as a down payment or selling it out right. I have a 03 Malibu and its only got 23,000 miles so for me leasing is foolish. Even when I put 20,000 miles a year on my cars I would still buy than lease I don't think you make money either way a car is a poor investment but since you have to have one then I will own all of mine. I have heard stories about all the hidden costs when you turn your car in at the end of your lease they even check the tire tread and you might have to spring for new tires on a car you will no longer own. To many variables buy one and you don't have to worry what you do with it its yours or the banks till its payed off.

My vote would be to buy, always.

I personally could not consider a vehicle "mine" if I was leasing or making payments on it. The bank would own it, not me. I have financed one vehicle in my lifetime and I paid it off in six months even though the contract was for 48 months. I have paid cash for all subsequent vehicles and will continue to do so.

there are many good articles in the net on this subject.
One factor is, how long do you keep your vehicles? If you tend to flip them every few years then lease. Reason is, buy or lease, you pay for the amount of the vehicle you end up using.
On a buy, there are factors you cannot control, ie the use vehicle market & value when you try & sell/trade it in in 3 or 4 years. YOu pay full price, and get a residual on the sell or trade at the end. This is your cost of using the vehicle.
On a lease, the car company estimates the value at the end, so all you pay for is the amount you "use" during the term of you lease. YOu don't have to worry about getting you initial investment back in the form of your trade in.

If you keep your vehilcel for a long time, then buy it.

Launch Mini said:

If you tend to flip them every few years then lease. Reason is, buy or lease, you pay for the amount of the vehicle you end up using.

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I want to tack on to launch's point about paying for the "amount" of vehicle you are using. Remember that the first years use is most costly in terms of depreciation. Your paying for the most expensive year or years in a 1 or 2 year lease. Unless you would be buying a new car around the time the lease expires anyway leasing tends to cost more in the long run.

If you drive a lot of miles most leases tend to sock you with mileage penalties. High mileage drivers tend to do better not leasing.

Since you mention a truck it's important to consider usage. If you actually plan to use it as a truck every "character mark" from hard use/work incurs a penalty cost at turn in. Some people I have known who leased trucks also had clauses in the lease about no off road usage as well.

I'm a buy and hold type and have never bought brand new. The best thing about leasing for me is a robust market of used vehicles with only one year of use. :naughty:

as stated - if you want a new vehicle every 2-5 yrs (and continually have new vehicle warranty for repairs) - lease it, if you want to keep it for a while and eventually own it - buy it.
lease also means you making payments for something you don't and probably won't own. (a simpler way to think of it is "renting" it)

note: leased vehicles also mean no modding or adding accessories, you need to keep it repaired/maintained, and need to watch your mileage on it otherwise you'll have hefty end of lease penalties etc
Remember leased means someone else owns it.

there are also tax benefits that you can write off if used for business so check with your accountant.

generally for personal use, buy it.
for business use, lease it

When you lease, you are entering into basically a very long-term rental agreement. Instead of renting a car for a week, you're renting it for 2-3 years; and you happen to get one that hasn't been rented by someone else. Other than that, there's no difference.

When you buy, all of those monthly payments create equity. It's the only advantage over leasing, but it is a huge freaking advantage!

Big enough, that I won't even consider leasing a vehicle.

As far as trucks go, if you need their capability only once in a rare while; you'd be better off renting a truck. If you really need a truck, buy the truck. But don't lease it.

I used to only buy new vehicles. Now I only buy used well taken care of vehicles. The money savings is too great to ignore.

Monocrom said:

When you lease, you are entering into basically a very long-term rental agreement. Instead of renting a car for a week, you're renting it for 2-3 years; and you happen to get one that hasn't been rented by someone else. Other than that, there's no difference.

When you buy, all of those monthly payments create equity. It's the only advantage over leasing, but it is a huge freaking advantage!

Big enough, that I won't even consider leasing a vehicle.

As far as trucks go, if you need their capability only once in a rare while; you'd be better off renting a truck. If you really need a truck, buy the truck. But don't lease it.

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Really NO equity is built up, until years 3 and on. If you put this extra cash away ( the larger loan payment minus the lease payment), you start building equity after month ONE.

The comment about personal vs business use is a large impact on the decision. Unless it has changed, normally you cannot deduct your payments from your business taxes unless you lease, which then classifies them as an "expense". If you are using it for personal use, then you cannot deduct the lease payments no matter what.

I leased a car prior to this change, and it was "ok", but I wouldn't do it again. There are so many hidden aspects in a lease that even a careful read can miss. A classic one I missed - if I bought the vehicle BEFORE the last payment, as opposed to after, it saved money.

IMHO, leasing was developed to help banks make more money from car buyers than the more simplistic loans. Sometimes though, you just have to bite the bullet and do what it takes to get a vehicle, which can include leasing.

Launch Mini said:

Really NO equity is built up, until years 3 and on. If you put this extra cash away ( the larger loan payment minus the lease payment), you start building equity after month ONE.

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With a leased vehicle, when you're done with that last monthly payment; you have nothing to show for it. (If you don't want to spend an extra penny by buying the car you leased.)

Bottom line: When I make the last monthly payment on my car, which isn't leased, I'll have something to show for all that money I spent.

only lease it if you can write it off. otherwise you are almost always better off buying. Some people justify a lease by saying "I get to drive a new vehicle every 2-3 yrs" or "I get more vehicle for my money"

I've always bought my new cars. I intend to keep them for several years after payoff and want something to show for my money. I try to take good care of them so they are in good shape and reliable once payed for. At this time in my life I don't put many miles on them either. Having no car payment is like saving money to me. The only expenses then are upkeep. That's gonna most always be cheaper than monthly payments.

I just bought a new car day before yesterday. Nothing down, 0% financing and well under sticker. Hard to beat that, IMO.

Thanks for the input everyone.

Looks like the majority of responses here are on the "buy it" side.

All of the above mentioned information makes sense to me so now it's time to gear up for the negotiation process.

I am thinking that the "show me the dealer invoice" angle is a good place to start?

Thanks again :thumbsup:.

I would use kelly blue books web site for some guidance.

Another way is to start with a dealer that is 50 miles away and get an offer from them. After that, start moving in closer to home.

I can't help but throw in my hope that you are supporting the North American economy in your purchase, and I don't mean just the final point of assembly.

Leasing a car or truck is the biggest ripoff in the world. You have all the disadvantages of owning a car with none of the advantages. You are responsible for everything, including taxes and maintenance and nothing to show for all your payments when the lease is over. Do not lease!

FroggyTaco said:

I used to only buy new vehicles. Now I only buy used well taken care of vehicles. The money savings is too great to ignore.

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I agree. I think new vehicles are one of the biggest ripoffs there are, and I just don't see the advantage besides wasting about ten or twenty grand to get new car smell. :thinking: (which is actually kind of unhealthy)

I own five trucks that all are in relatively good condition. If I sold them all I *MIGHT* be able to buy 1 new one. I'd rather have five. My mom just bought a $60,000 BMW for $7500 because it had 101,000 miles on it. She spent about another 2 grand having it detailed and checked over/fixed/tuned up by the dealer. I would slap her and call her stupid if she spent $60k on the same car with 10 miles on it...somebody lost about $53,000 being dumb/rich enough to buy that car new. (that's more than $0.5/mile) Even if my mom simply sent it to the crusher and got scrap value for it after 202,000 miles (it should easily last that long and still be nice and have value) it would only have cost her less than $0.10/mile. And she's still driving a "luxury car" and gets complimented on it.

Then again, my favorite truck is my restored '79 Chevy, cost roughly $5,000 in 1979 and is worth a little more than that today. I will drive it until the wheels fall off, and then bolt them back on. I already have it in writing that I am to be buried in this truck.

Another vote for buy, lightly to moderately used is my personal preference. The newest vehicle I ever bought had 31K miles on it. I've had it 4 years and now have 100K miles on it with no intention of selling/trading. Every time I have repairs (which have been very infrequent) I just think about how many car payments it will equal (not many in the long run).