Should You Buy or Lease a New Car? | Consumer Reports

Should You Buy or Lease a New Car? | Consumer Reports

You’re looking for the
car of your dreams.
Should you buy or lease?
When you buy, if you’re
not paying outright,
you get a loan to
pay for that vehicle.
But when you lease,
you pay for a portion
of the vehicle’s total value.
And at the end of
the term, you either
return it or you pay off
the remaining balance.
Consumer Reports’ money
editor of Octavio Blanco
has identified five
different types of drivers.
Which one are you?
First up, the road warrior–
you drive more than
15,000 miles a year.
Octavio says, as
a marathon driver,
you’ve got a clear choice.
If you plan to put tons
of miles on your car,
you’re better off buying
rather than leasing.
It’s because most
lease plans have
mileage limits of between 10,000
and 15,000 miles per year.
And if you go over
that limit, you’re
going to have to
pay a hefty fee.
Now, on the other hand, if
you buy your car outright,
you don’t have to keep
track of the miles at all.
Next, we have the freshman–
young drivers with little
or no credit history,
are going off to college,
or have student loans
and are strapped for cash.
If you fit this
bill, then you might
want to say yes to the lease.
If you’re new to the game,
you might be better off
leasing rather than buying.
It’s because leases
generally come
with lower monthly
payments, and that’s great
when you need to pay
back your student loans
or take care of
other monthly bills.
And don’t forget, when
you’re at the dealership,
you can negotiate a lease
just like you would negotiate
the purchase of a new view.
Number three, the
early adopter–
one of the biggest perks
of leasing a new vehicle
is that you get to experience
a new car every two
to three years.
Leasing is great if you
want to be on the cutting
edge of technology with
the latest safety features
and infotainment systems.
It’s also great if
you want to experience
the latest in electric car
technology, where we’re
going to see big improvements
in how far a car can
go on a single charge.
Then you have the ding-king.
He or she plans on holding
onto that car a long time.
But expect a few bumps, bangs,
and boo-boos along the way.
If that’s you, then
you’ll want to buy.
Damage to your vehicle can
be more stressful when you
lease rather than when you own.
That’s because of the
hefty fees involved.
However, when you own, wear
and tear on your vehicle
could reduce its
trade-in or resale value.
And last but not least,
the penny saver–
if you’re looking for the
cheapest monthly payments
right now, leasing
is the way to go.
Payments on a lease
are usually less
than when you buy
because you’re only
paying for the
depreciation of the vehicle
during the term of the lease,
plus taxes, fees, and interest.
But that doesn’t
mean that you get
a car for less because
leasing can get you
into an endless
cycle of payments.
When you buy a car, the
payments eventually end.
Whether you ultimately
choose to buy or lease,
be sure to read the fine print
before signing and driving home
in the car of your dreams.

36 Replies to “Should You Buy or Lease a New Car? | Consumer Reports”

  1. If u want to save money and get a new car. Get a used electric car if your commute is short. Or get a plug in hybrid. Honda clarity, Prius plug-in etc
    Or get a used Prius.

  2. Or buy a used reliable car. Lower your expectations and gather your money that means more than a pile of metal who should take you there from A to B and back. Think about your priorities in life than short term vanity.

  3. Is Penny Saver a reference to penny wise and pound foolish? Lowering monthly payments while not caring about long term costs to own a car.

  4. This is good simplistic explanation of Buy vs Lease and covered the points overall quite well. Having said all this, I Leased once and never have since and do Not recommend Leasing whatsoever. Generally Leasing is cheaper on monthly payments, but when you factor it all in, is actually more expensive in the long run in many cases , the long run only being 2, 3 or 4 years depending on the Lease. At the end of 4 years on a Lease you own nothing…. zero ….nada !! Plus you have usually to pay quite a bit down on signing the Lease , plus take insurance for possible damage, plus mileage plan to calculate how much you drive a year to determine lease , plus etc etc. Whereas if you had purchased and even on Financing over 6 years and even better over 5 years ( 4 years is best but not as common now ) you have equity and higher residual value even on a trade in or even better selling your vehicle. The argument of cheaper monthly payments is a good one but don't forget to factor in the money down at signing and spread that out over you lease period to get a true representation of monthly payments ( to mention nothing of Present Value…but gets complex so for sake of argument forget it to keep it simple )
    For students on a tight income or anyone tight of money, low paying job, single parent etc, regardless just look at less expensive vehicles. There are great deals on less expensive cars with excellent financing out there. People though want cars they can't afford , the car manufacturers know this and sucker you in on a Lease. Resist the temptation and just stay in your budget.

  5. I would say I am the Ding-King, that means I will have to buy a cheap, low initial cost vehicle so that I would not lose too much in the depreciation of the value of my vehicle over its life of ownership. Any way I am first again. Americans seem to work real hard, no time to watch Consumer reports videos as soon as they come out. Let's see if I can keep it up. 😄

  6. If you are a freshman, you don't get a car – you only get one when you need it. Leverage Uber, leverage zipcar, but don't get a car. That is what millennials do now why not you?

  7. DOES ANYONE REPLACE THEIR HOT WATER HEATER OR FURNACE EVERY 3 YEARS????NO….. Obviously…. in fact, you'd be very angry if you had to replace it 10 years out.Then WHY is it that people feel it necessary to get a new car every several years????  Because you are brainwashed into supporting an industry that preys on people's egos that what you drive is a reflection of who you are. Buy a 2 or 3 year old reliable car and maintain it and you'll save a fortune.

  8. Lease all German vehicles.
    Buy all Japanese & Korean vehicles.
    Lease all FCA products (except Wrangler).
    Buy all GM vehicles.
    Lease Ford cars, Buy their trucks.

  9. Buying makes the only sense for me personally. I get accustomed to and bond with my car so I want to keep it for as long as it can go. I'm still adding miles to a Mercedes from 2000 with more than 350 000 miles in total.

  10. Why would someone with no credit lease? They would’ve approve for the good deals and practically be buying car with that price

  11. Disappointed. Usually i learn a ton of new stuff from CR’s videos and articles. This video had no added value; the recommendations that were offered in this video are “common knowledge” in my opinion. I still love CR, just didn’t enjoy this video.

  12. Road warriors can also consider getting lease takeovers of low-mileage cars that are way under their mileage limits. This will limit their repair bills, and if they are self-employed, there is cost certainty and a way for them to reduce their car payments with a cheaper lease takeover if there is a drought in their business.

  13. Incredible that they recommend a freshman or otherwise young driver strapped for cash or already in debt to lease a brand new vehicle. Talk about terrible advice. Leased vehicles also always require you to have full coverage insurance on them, funny they don't mention that anywhere in this video. The best advice isn't even present in this video; that being buy a used or certified pre-owned car 2-5 years old (or older if you like) so the original owner has already absorbed most of the depreciation for you. If you're a freshman with debt and not much income you probably shouldn't be spending more than 5k on a used car, if that.

  14. What a terrible advice. NEVER lease unless you have no choice or know you will need a car for only a couple of years and then either buy a new car, or not need a car after that. And everyone has a choice if they cannot buy a new car: buy a used one and save tons of money.

    – If you want to paying for a car FOREVER, including the depreciation, and NEVER OWN ANYTHING, and be locked on a contract that won't be cheap to get out of, then go ahead and lease. Lease is like renting, except that you still need to pay for repairs and maintenance, you pay for the depreciation of the asset, and you get no tax benefit. All the traps of renting and none of the benefits. Does that sound good to you?
    – If you don't want to have car debt now (buying in cash, if you can) or in the future (getting a loan interest loan and term of less than 48 months), and you don't want to worry about how much you drive, and you want to make your own decisions on if and when you repair damages, then buying is the ONLY choice.

    Yes, technology evolves, but not as rapidly as some what you to think, and a 5 or even 10 years old car will be alright to drive. Yes, there is depreciation and the residual value of the car may be small when you decide to trade it in, BUT what people forget to mention, is that you ARE paying for the depreciation of the car when you lease, and a small residual value is better than no value at all – which is what you will have at the end of a lease term, if you are lucky.

    Finally, you NEVER EVER buy your car at the end of your lease. The buyout price is in your contract, and the bank never negotiates that after your lease is over. And, virtually in 100% of the cases, you will be able to find a used car in the same or better condition than the one you are returning for less than the value in your contract.

    It is as simple as this – if you can't afford to buy a new car, then DON'T. Simply buy a gently used vehicle you can afford and SAVE MONEY. Then if you really want to have a new car, buy it – preferably in cash but avoid leasing like the devil if you are a private person (vs. a company that can have monetary benefits in leasing).

  15. Lease for the miles you drive per year with $0 down, carry gap through your auto insurer, sell the lease to (Carmax, Vroom, Carvana, AutoNation) during it's last month and pocket the difference, repeat.

  16. Walk into enough businesses and you will find some losers. I have been in the car business since I was 16. I own a large auto retail consulting business, teach live and on line with best selling books on Amazon. I have taught more car people how to become rich the right way, using honesty and transparency than anyone else anywhere. I'm sick of the stupid attacks on our industry by people looking for clicks and views. Why don't you go do a hit piece on the media, airlines, phone companies, big pharma or the food industry?!? I love the car business and car people! And 99% of these so-called consumer advocates are people that failed out of our business and now grind their axe publicly, nothing more than sore losers.

  17. 1:38 Nowadays technology rules the car industry and if one can stay within the mileage cap than leasing makes more sense. With how fast technology is improving in cars especially in the electric car sector than why buy such a car when it gets dated so fast and the car depreciates much sooner.

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