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Re: Cars - How Long to Keep, Buy Outright, Loan or Lease?

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Today everything lasts only as long as the electronics don't become outmoded .. which is not as long as things that didn't depend so much on technology. My guess is that retrofitting of newer safety systems will be too expensive, or operating systems will become obsolete .. just like computers & smart phones. Every few years there will be so many improvements to cars, that the longevity of the mechanicals & body will be the least of the considerations, when it comes to replacing them.


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Re: Cars - How Long to Keep, Buy Outright, Loan or Lease?

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Find out how long should a car last and how to make it last longer in AARP's new article: How Today's Cars Are Built to Last

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Re: Cars - How Long to Keep, Buy Outright, Loan or Lease?

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@kl103796 wrote:

Thanks for your input. I have never leased. You mentioned no maintenance or repair costs. Is this true for all car dealers? My 2003 Rav 4 has 175,500 miles and I am researching leasing vs purchasing.


Most leases will run for only a few years, maybe 2-3-4 years. Leasing works best if you have it until the factory warranty expires (no longer). In this case you're protected from major repairs and you have a known predictable cash flow for auto expense.

But for someone who keeps their vehicle for many years and well over 100,000 miles it's probably more cost effective to purchase from the beginning, no lease.

Hmmm, I did once lease a car. A Toyota Corolla. Bought it after the lease ended. I crunched some numbers and in the end I think I may have come out slightly ahead this way versus outright purchase...but this involves some guessing on purchase price. Anyway, I felt better about it then. Likely will not lease again.

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Re: Cars - How Long to Keep, Buy Outright, Loan or Lease?

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Thanks for your input. I have never leased. You mentioned no maintenance or repair costs. Is this true for all car dealers? My 2003 Rav 4 has 175,500 miles and I am researching leasing vs purchasing.

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Re: Cars - How Long to Keep, Buy Outright, Loan or Lease?

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@TravelledOne wrote:

I buy new and buy cars with good track records like a Toyota or Honda. I also keep them; the last one for 15 years which was then sold to a friend.

 

I do my own maintenance, servicing and repairs.

 

I also pay cash for my new cars. I am too poor to make those extra interest payments.

 

As for leasing, that has got to be the dumbest way of owning a car. You are making monthly car payments for the rest of your life. How smart is that?


I seriously doubt that you do all your own repairs, unless you're an ASA-certified mechanic with the required tools and test equipment, and buy all your parts wholesale. Unless, of course, you own a vehicle from the 1970s or 1980s. Just saying - I did major and minor work for 20+ years before regulation put the kibosh on that.

 

Leasing is only a dumb move if the tradeoffs don't outweigh the benefits. That calculation differs for each driver - and each situation. It's simply a matter of assessing your own needs, short and long-term. Money is only one part of that assessment. If that's your only priority, though, then yes -  buying a beater and running it into the ground is your best bet. You're betting that the old heap will deliver when you need need it the most. Good luck.

 

Parts, labor, and repair costs have skyrocketed since my last new vehicle in 1992. For this and other reasons, for the first time I'm considering the leasing option when beetlebomb finally succumbs to nature. At some point, ya just gotta let go.

 

As far as the monthly payments go, there are upsides to that as well. But, that's an important part of the total assessment required before you make the decision. You're certainly not going to be paying "for the rest of your life" if that option doesn't work out. A lease is a finite contract - just like a new car note. In this age of 6-year (or more) bank notes, that's something worth considering.

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Re: Cars - How Long to Keep, Buy Outright, Loan or Lease?

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bk3688 wrote: "...... the dumbest way to own a car may be to purchase it.  Leasing can be very attractive financially if the money factor is low enough and the residual is high enough.....".
   IF you purchase a car and keep it until the paint falls off, you'll save money. Leasing is nice because you get to have a shiny new car, possibly much nicer than you can afford to purchase, under warranty, probably no repairs needed other than normal maintenance, easy trade in, low payments.   That's a nice lifestyle choice many, if not most of us, would like.
   But long term, you'll spend far more money than if you purchase the car and keep it until the paint falls off. There is nothing 'dumb' about that. It can be inconvenient, especially once the car gets older, because you'll need any number of expensive repairs. But, by then, car should be paid off. Also, keep in mind, cars are so much better built than they used to be. We all grew up with exhaust systems needing to be replaced every few years, tune ups every year, and in general, all parts needing replacement far sooner than they do now.
  

"...Why is everyone a victim? Take personal responsibility for your life..."
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Re: Cars - How Long to Keep, Buy Outright, Loan or Lease?

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@bk3688 wrote:

Alex, the dumbest way to own a car may be to purchase it.  Leasing can be very attractive financially if the money factor is low enough and the residual is high enough.  If you understand the innards of car leasing and the factors that affect it, you can often construct some very good deals. 


So why are all the experts consistent in telling people that leasing isn't a good deal? Don't they always find ways to decrease the residual value, by penalizing for even the teensiest dings & scratches? And if you go above the allowed mileage?


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Re: Cars - How Long to Keep, Buy Outright, Loan or Lease?

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Alex, the dumbest way to own a car may be to purchase it.  Leasing can be very attractive financially if the money factor is low enough and the residual is high enough.  If you understand the innards of car leasing and the factors that affect it, you can often construct some very good deals. 

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Re: Cars - How Long to Keep, Buy Outright, Loan or Lease?

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I buy new and buy cars with good track records like a Toyota or Honda. I also keep them; the last one for 15 years which was then sold to a friend.

 

I do my own maintenance, servicing and repairs.

 

I also pay cash for my new cars. I am too poor to make those extra interest payments.

 

As for leasing, that has got to be the dumbest way of owning a car. You are making monthly car payments for the rest of your life. How smart is that?

Alex
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Re: Cars - How Long to Keep, Buy Outright, Loan or Lease?

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Good topic, considering how much vehicles have changed over the last 20 years. Consider the following:

 

Used to be that a reasonably skilled owner could perform most of the routine maintenance and repairs themselves. I was in that category for many years - and saved countless dollars in the process. Those days are long gone. Mandatory fuel efficiency, safety, and pollution standards have forced manufacturers to basically re-invent the wheel. All good measures, IMHO, but these mandates dramatically drove up the cost of even the most basic vehicle. And, have severely limited the amount of work the average owner or backyard mechanic can perform. All modern vehicle functions revolve around a system of computer modules and sensors  - everything from the radio to the engine trim. Replacing a single module can set you back thousands. "Smart" ignition keys now cost about 30-50 bucks for a spare - no more 2-dollar copies from your local hardware store. Just getting to the spark plugs on some vehicles requires lifting the engine off it's mounts! The list goes on, but the bottom line is that, in addition to the purchase and operating costs, maintaining today's cars is a significant expense.

 

I can see why someone would consider leasing these days. In the past, most drivers would spend less over time by buying over leasing. But with gas prices and the cost of repairs, that option is looking more attractive - if you don't expect to go over the mileage limit. I may consider that option myself, when it comes time to retire my current ride.

 

I can definitely understand why so many folks are holding on to their 10+ year old vehicles. I'm one of those, driving an '02 S-10 Blazer. It's got over 250K miles on the clock, and I expect to get at least another 50K-80K miles out of it. I need a 4WD vehicle up here in snow country, but the prices of late model trucks and SUVs are just too far out of range. Over the last 5 years, I've spent around $8500 in repairs for ol' Betsey. Still, far less than I would have paid for a decent 2-3 year old replacement. On some new vehicles, I would have lost that much money just driving it out of the showroom. Yes, times have changed.

 

We're fortunate to be living in a time when vehicles can be expected to last 300K miles or more. My neighbor's 1998 Camry just passed the half-million mile mark. But to get this kind of longevity from a vehicle, regular maintenance is imperative. Eventually rust will get the better of any car or truck, and there will also come a time when the frequency of repairs outweighs the cost of replacement. However, I remember the days when cars were much cheaper to purchase, but were ready for the junkyard after 80K miles. Either way, keeping a vehicle has always been expensive - but I wouldn't go back to the old days.

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