To Lease or Buy?

I am due to graduate college in December 2016, and have already started dreaming about the new car I will be driving when that happens. After graduation, I will start working in public accounting and will be receiving big paychecks (hopefully!). I thought I should lease the car, that way I would be able to drive a new car every few years and would not have to worry about repairs. However, I have always heard leasing is not a good financial decision. I turned to financial expert Suze Orman who confirmed it was a bad idea. Some of her thoughts on leasing include:

• It’s not your car, don’t pretend it is!
• If you don’t return the car in pristine condition, you will get charged extra fees
• Watch the odometer: Most leases only allow 12,000 miles a year
• • While your morning commute may be quick now, you have no idea what will happen in the next two years. You may get a new job, causing you to drive more miles. Or, someone in your family may become ill, forcing you to drive more to care and visit them.
• The never ending leasing cycle
• You may be subjecting yourself to a life of having to make a car payment every month.
• • You are shelling out $4,800 a year, every year, for the rest of your life
• Instead, buy a car and finance it for $400 a month over a four year period. After the financing period ends, drive the car for another five years.
• • If you save $400 a month for five years at a 6% return, you will have almost $28,000 saved.

After reading this article, I am going to look more at buying a “new used” car instead of leasing. New used – A vehicle that is one or two years old, but has been well-maintained and doesn’t have a ton of miles.

Click the links below to learn more:
http://biz.yahoo.com/pfg/e16buylease/art021.html
http://biz.yahoo.com/pfg/e16buylease/art011.html

Written by: Caitlin Distelrath