Lease a Vehicle or Buy – Part I

Gus Philpott
Woodstock Advocate
October 24, 2007

So now you are off to get a new car. Brace yourself! You’ve heard of “sticker shock”; right?

The best time to shop for a new car is BEFORE you need it. If your old jalopy is on its last legs, you are flirting with the danger zone. Shop before you drop. Spend some time, regularly, shopping for the type of car you might buy.

Remember those key words: “type” and “might”.

What do you need a car for?
What do you want a car for?

Buying (or leasing) a car is often the second largest expenditure an individual or a family makes. And many seem to do in about 2-3 hours. Wow! Big mistake! Car salesman get lots of experience "selling" cars; you get a little experience every 3-4-5 years "buying a car." Whom do you think has the advantage?

Once upon a time I sold new cars in Denver. It was the worst two months of my life. The belief at the new car (Nissan) dealership was, if a car had a flat tire in front of the dealership and the driver came in to use the phone to call for help, that driver really came in to buy a new car. How stupid! I wouldn’t play that game.

This morning I heard an ad on a local radio station for a dealership in Crystal Lake. The pitch was to lease one of their cars, and the excess-mileage rate was mentioned. What was it? $0.15/mile for annual mileage over 10,000! Who drives a car just 10,000 miles/year these days?

Let’s say you leased their car and drove it 15,000 miles each year. Those 5,000 extra miles will cost you $450 (5,000 x $0.15), when your lease is up. If your lease is for three years, you can plan on coughing up $1,350 at the end of the lease. How is a lease sounding now?

I did a little surfing tonight, and I would like to point you at http://www.newbuyer.com/autoleasing/ for information on the question of buying vs. leasing.

Why do many people lease? Because they can get more car than they can afford to buy outright. In certain cases, it may make sense to lease a vehicle. I suspect, in most non-business circumstances, that it does not. But check it out.

And watch out for those “deals” that are going to nail you big-time with charges that you’ll love to hate at the end of your lease.

In a car purchase everything is negotiable. Even those advertised "non-negotiable" prices. If you pay them without negotiating, you are just giving away your money. If you have some extra, just give it away in this direction.