Automotive

Leasing vs buying a car

  • Last Updated:
  • Dec 7th, 2017 1:47 pm
Deal Addict
Mar 10, 2006
2990 posts
540 upvotes
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alanbrenton wrote:
Dec 3rd, 2017 8:58 pm
It is like renting vs home ownership but for a depreciating asset.
Exactly.
As I said before, buying is a more sensible choice for most people in most cases.
Just that thinking back my ownership experiences for the cars that I owned for 10+ years each and now how I use my car for my work/life, I see leasing is probably better for me.
Newbie
Nov 28, 2017
13 posts
Hi! There are lots of online calculators to help you figure this out. But it doesn't make sense. You are missing a lot of details - like your buyout, term, monthly payments, etc.. Just google lease calculator and use one of them to see what you get.

Good luck.
Member
Apr 20, 2011
378 posts
8 upvotes
Scarborough
If one were drive a vehicle for 10 years and you didn't care about driving the same vehicle, does financing always work out to be the best option ? Using example numbers below:

Finance Car for 5 years and keep car for a total of 10 years - lets assume car costs $50k, therefore car will be paid off after 5 years + 6 years of maintenance costs (assuming first 4 four years is free for most maintenance from dealer and then for remaining years lets assume $2k x 6 years = $12k)
Total Cost after 10 years = $62k

Lease cars within 10 years - lets assume $25k for a 3 year lease (or $8.3k every year) and you changed the car every 3 years
Total Cost after 10 years = $83k

Does this always make sense that leasing would always be ultimately more expensive than financing for large time interval (ex. 10 years)?
Sr. Member
Sep 13, 2008
642 posts
84 upvotes
Toronto
I'm on my first ever lease right now. The decision to lease was based on the following;

- I would like to change cars at least every 5 years
- I would like to drive something nicer
- I want my car to be under warranty for the time it is in my possesion
- I drive 15,000 km per year
- My wife had an accident on her car...it affected her trade in value
- When I ran the numbers, I would have to drive a car 5 years to reach the break even point vs leasing
- Leasing is less upfront costs

Only downsides I see for me are potential charges for any damage at end of lease and I can't have any mods on the car.
Member
Nov 13, 2011
440 posts
130 upvotes
Vancouver, BC
dainfamous41 wrote:
Dec 6th, 2017 11:19 pm
If one were drive a vehicle for 10 years and you didn't care about driving the same vehicle, does financing always work out to be the best option ? Using example numbers below:

Finance Car for 5 years and keep car for a total of 10 years - lets assume car costs $50k, therefore car will be paid off after 5 years + 6 years of maintenance costs (assuming first 4 four years is free for most maintenance from dealer and then for remaining years lets assume $2k x 6 years = $12k)
Total Cost after 10 years = $62k

Lease cars within 10 years - lets assume $25k for a 3 year lease (or $8.3k every year) and you changed the car every 3 years
Total Cost after 10 years = $83k

Does this always make sense that leasing would always be ultimately more expensive than financing for large time interval (ex. 10 years)?
Yes Leasing is always more expensive since are paying for 2 cars worth of depreciation over 10 years vs one car's depreciation which tapers off after the first 5 years.
Deal Addict
Jan 8, 2007
1832 posts
429 upvotes
Calgary
alanbrenton wrote:
Dec 3rd, 2017 8:58 pm

It is like renting vs home ownership but for a depreciating asset.
Own appreciating assets, rent depreciating ones :)


darkcloud8282 wrote:
Dec 7th, 2017 2:33 am
Yes Leasing is always more expensive since are paying for 2 cars worth of depreciation over 10 years vs one car's depreciation which tapers off after the first 5 years.
This is true. But, we are comparing 2 different things there and in my opinion it's not a valid comparison. Owning 1 car over 10 years vs 2 news ones over same period is completely different.

A better comparison would be if you: Financed and Leased the same car over say 4 years each. After 4 years you turn your lease in and get a new lease. At the same time you sell your paid off financed car and get a new one. After another 4 years you do the same thing. I bet the total costs would be very similar given same make model interest rates etc.
Deal Expert
User avatar
Apr 21, 2004
41522 posts
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darkcloud8282 wrote:
Dec 7th, 2017 2:33 am
Yes Leasing is always more expensive since are paying for 2 cars worth of depreciation over 10 years vs one car's depreciation which tapers off after the first 5 years.
That's a very good point. For really expensive to repair cars, leasing within the factory warranty and buying excess wear and tear is probably best though.
Newbie
Dec 6, 2017
1 posts
Cars overall in Canada are expensive. If you are someone that needs the latest and greatest cars, then leasing is effective.

If you are someone that just wants good value and doesn’t mind to have an older car that has been run in, buying is perfect. Yes, you have to upkeep the car and there is wear and tear but if you look after it and choose the right brand, it will pay greater dividends at the end

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