Is it cheaper to LEASE a car, or buy it CASH?

**entrepreneur513** · 08-30-2009 09:27 PM

I keep hearing that leasing is better, because you can write the lease off on your taxes, but not if you buy it outright?

But if you show up to the dealership with cash, doesn't that give you leverage?

I've heard stories of people getting a few thousand shaved off the MSRP because they bought it in cash....

**myfayt** · 08-31-2009 09:32 AM

Leasing a vehicle adds thousands of dollars of interest on your loan. If you lease to buy for 5 years, you are paying a heck of alot of money. Depending on dealership and their loan company, if you buy a car for $15,000 after 5 years you've paid back around $4,000 so it really costs you $19,000. However if you paid the full thing it's still only $15,000 nothing owed.

Do what I do, buy a cheap car with no problems a used one. I bought a 1989 Pontiac Firebird for $1,200 and drove it for 5 full years and not a single problem with it. It had 218,000 miles on it and now has 268,000 miles.

**byzantium** · 09-01-2009 07:02 AM

If I was to buy a car, I would DEFINITELY wait until I had cash in hand, and buy it outright, no payment schedule or anything. I would also buy an inexpensive car, just enough to go from point A to point B. I drive a lot for my business so I need good gas mileage. I'm interested in the Hyundai Accent 3 door right now.

If you show up to a dealer and announce that you have the cash to buy outright, sometimes you can get a really good deal. Leasing is a shitty deal, it adds many thousands of dollars to your cost, and you ultimately don't keep the car. Buying a car for cash payments is also stupid, since cars depreciate so rapidly, and you pay such high interest unless you have gold plated credit. Just buy the car for cash.

**element94** · 09-02-2009 12:51 PM

Let me share my experience :
My car costs 27,157 euros before taxes.
32,000 euros after taxes.

With the lease i took i was supposed to pay 37,000 euros.
Because of the Euro getting stronger against our local currency, i ended up paying 40,000 euros.

Do you still want to lease ?

**NikeMikey** · 09-02-2009 01:01 PM

Well is better to buy a car with cash and its cheaper. Lease a car is nice if you have enough money for the lease. Or go out on payments if you really like the car, basically paying for the car with tomorrows dollars/euros.

Just remember your buying a depreciating asset but I'm sure you already knew that.

**ZingerIntl** · 09-02-2009 02:10 PM

Originally Posted by entrepreneur513

I keep hearing that leasing is better, because you can write the lease off on your taxes, but not if you buy it outright?

But if you show up to the dealership with cash, doesn't that give you leverage?

I've heard stories of people getting a few thousand shaved off the MSRP because they bought it in cash....

Listen, many people here want you to do what they do, cause somehow they believe their way of doing things is what you actually wanted to know, instead of answering a question that you asked. If you are the type of person that does not want to worry about your vehicle, always have warranty, and want to look and feel respected, (its sad but true that people judge) then a lease may be the way to go. If you are going to drive more than your yearly allowable mileage than it may be very expensive in the future. If you plan on just always paying for a vehicle, whether its monthly lease payments, or upkeep of your car in the future, or taking the loss on the sale... no matter which way you go about doing it, you will always pay for a car. Its a liability not an asset as other seem to think a car is.

So you have a lot to consider. Let me help you.

Are you going to drive more than 24000 miles a year?
Yes- do not lease
No - Lease is a good option

Are you mechanically inclined and do repairs yourself?
Yes - maybe a lease is not a great idea (i spent 2 hours in a shop last week because the warrantee work requires that they do it. All I needed was the battery changed and I am very mechanically inclined)
No - Well then you will want to be worry free with warrantee for all your cars.

Are you in business that will actually utilize your write offs?

So, no matter what you do, you will always pay for a vehicle. Some will disagree but vehicle repair is not cheap, either is depreciation. A lease will allow you the write offs as well as a monthly budget. It will cost you more in interest.

ASk yourself this, is your income very stabile? If not, you do not want payments. If yes a lease is fine.
Do you have cash reserves if you pay for this car cash?
Can you lease the car and take the cash, invest it in something that will offset the costs of the car?

I gave you a lot to think about but I do not have all yourt info so I can not eliminate anything for you.

I would totally offer Myfayt $100 for his Firechicken tho.

**ZingerIntl** · 09-02-2009 02:15 PM

I know a guy that swears by this method and to be honest he is the olny one I have ever heard of that does it.

Take cash into the dealership, use your leverage to talk them down as far as you can, then say "Ok for that price I will take it but I want to lease it at that price." He says it works and he is fairly credible but I dont know.

**ernest1918** · 09-02-2009 03:01 PM

Originally Posted by ZingerIntl

I know a guy that swears by this method and to be honest he is the olny one I have ever heard of that does it.

Take cash into the dealership, use your leverage to talk them down as far as you can, then say "Ok for that price I will take it but I want to lease it at that price." He says it works and he is fairly credible but I dont know.

interesting I will have to try that

**ecbautosport** · 09-03-2009 03:19 PM

As an individual who has bought and sold something around 20 cars in the last 2 years (Don't tell state government, LOL) and working for a dealership for awhile. I will tell you there are benefits to doing both. I obviously prefer buying outright with cash. Taking a lease you get two things.
1. A new car with no wear and tear and a nice warranty to cover the car.
2. The ability to get a new car after the lease is up if you choose without having to go
through the hassle of selling the car.
Now if you have the cash to lease it is great. Yes you will spend more money then buying for sure but if you like those to things listed above then that is the route for you.
Now walking into a dealership with cash in hand is giving you a huge advantage. Cash is king to dealerships, but not to the sales person. The more they reduce the price the less commission they will be making, so keep that in mind. Make sure you speak directly with the sales manager he is the one that will work with you more because he is usually salary based and gets bonuses for better performance and sales. Go in there with a set price you want to pay for that car and do not get attached to the car, and certainly don't let the dealership know that. Also have as much research with you as possibly, such as Kelley Blue Book pricing for that car and NADA pricing, Carfax if you want (they may supply it, make sure to ask) hell even pull an Edmunds true value on it. That will let them know that you are prepared to buy if the price is right and it can kind of intimidate them a little too because you will be one of the few that actually brings that information. If they are not willing to work with you to meet your price then find another car, there are others.

**ZingerIntl** · 09-03-2009 06:08 PM

Originally Posted by ecbautosport

As an individual who has bought and sold something around 20 cars in the last 2 years (Don't tell state government, LOL) and working for a dealership for awhile. I will tell you there are benefits to doing both. I obviously prefer buying outright with cash. Taking a lease you get two things.
1. A new car with no wear and tear and a nice warranty to cover the car.
2. The ability to get a new car after the lease is up if you choose without having to go
through the hassle of selling the car.
Now if you have the cash to lease it is great. Yes you will spend more money then buying for sure but if you like those to things listed above then that is the route for you.
Now walking into a dealership with cash in hand is giving you a huge advantage. Cash is king to dealerships, but not to the sales person. The more they reduce the price the less commission they will be making, so keep that in mind. Make sure you speak directly with the sales manager he is the one that will work with you more because he is usually salary based and gets bonuses for better performance and sales. Go in there with a set price you want to pay for that car and do not get attached to the car, and certainly don't let the dealership know that. Also have as much research with you as possibly, such as Kelley Blue Book pricing for that car and NADA pricing, Carfax if you want (they may supply it, make sure to ask) hell even pull an Edmunds true value on it. That will let them know that you are prepared to buy if the price is right and it can kind of intimidate them a little too because you will be one of the few that actually brings that information. If they are not willing to work with you to meet your price then find another car, there are others.

Thank you, thats good info for all.