Author Topic: Is this an okay situation to lease a car?  (Read 11432 times)

duke09hms

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Is this an okay situation to lease a car?
« on: August 20, 2014, 07:16:02 AM »
Hi everyone!  First post here.

My fiancee is in medical school for two more years and needs a car to drive to various hospitals in the Cleveland area (harsh winters, poor road conditions).  These two years will be extremely busy and stressful (80+hrs/week), so she really does not want to deal with maintenance issues.  After these two years, both of us will be beginning residency in an unknown location, so we may (Durham, NC for example) or may not (Boston/NYC/SF) need a car in 2 years.

Right now Toyota is offering a lease for their end-of-season 2014 Corollas at $2k downpayment and $160/month, it will end up around $6k total for the 2-year lease.  Importantly, they offer a full maintenance package inclusive in that $6k price.

I know car leasing is usually a terrible financial decision, but in this situation, it seems to make sense:
Efficient reliable car
Fairly cheap cost of $6k
Full maintenance included
Good chance we only need a car for 2 years.

What do you all think?  Thanks!

BeardedLady

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Re: Is this an okay situation to lease a car?
« Reply #1 on: August 20, 2014, 07:22:27 AM »
No. You can buy a very reliable car for under $6K on Craigslist, then sell it for almost the same price you paid after 2 years if you find you don't need a car anymore. The most a $6K car would depreciate in 2 years is $2K, but you can probably even do better than that. I don't think there is ever a good (financial) reason to lease a new car.

ginklord

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Re: Is this an okay situation to lease a car?
« Reply #2 on: August 20, 2014, 07:24:58 AM »
You may want to consider a used Corolla or Chevy Prizm. You can find either for less than $2k, and they should both last to 200k with minimal issues, and you can sell it after two years to get most of your money back.

I'm not sure what you mean by "does not want to deal with maintenance issues". If it's the financial burden, you're still going to come out way on top with the used car. If it's the hassle of bringing it in, you will still need to do so with the lease for regular maintenance.

I don't see any reason why a lease is a better option, unless you want to pay for the luxury of driving a new car.

I hope this helps. Good luck!

MandyM

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Re: Is this an okay situation to lease a car?
« Reply #3 on: August 20, 2014, 08:11:54 AM »
Also consider any mileage limits - "the Cleveland area" is a big place and you could rack up a lot of miles in 2 years.

duke09hms

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Re: Is this an okay situation to lease a car?
« Reply #4 on: August 20, 2014, 08:32:21 AM »
Thanks for the responses everyone.

Mileage restrictions would not be an issue at all. 

What it boils down to is paying a few extra thousand for certainty and peace of mind.  The total maintenance package here is the main draw.  Knowing the very low probability of problems with a new car with the security that any issues/maintenance will be free is why we think the few thousand might be worth it.

How can you be sure of buying a "very reliable car" on Craigslist?  Especially given the tough winters and terrible road conditions of Cleveland (very harsh/corrosive salts and SO many deep potholes it's ridiculous).  Say you buy a 4k, 10-year old car on Craigslist, and for some reason the transmission fails.  You're immediately screwed financially.  Obviously this is a low-probability event, but it's one that would be potentially disastrous. 

Not wanting to deal with maintenance issues means emergent multi-day repairs vs scheduled convenient single-day maintenance.  You really do have to be at the hospitals almost every day, and medical students are judged over short-term time periods, so it's imperative you don't miss days.

ginklord

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Re: Is this an okay situation to lease a car?
« Reply #5 on: August 20, 2014, 09:14:10 AM »
The other risk you take by leasing a car is payments. If something bad happens, you still have to make the $160 / month payments no matter what.

I can share my own personal example. I bought a 2001 Chevy Prizm with 140k miles on it three years ago. I mostly commute back and forth to work in Rochester NY, with plenty of tough winters and terrible road conditions. I paid $1,400 for the car, and over three years paid for regular maintenance and some small repairs (CV joint eventually started leaking some grease, headlight switch needed replacement) for a total of $600 including oil changes.

That's $2k, plus 2 days total of repair days in the shop, over three years, and I'm selling it for $1,200 right now. I have a few people coming tonight, so I expect it to move fairly quickly.

Financially, there's no way that I can see any justification for the lease. "Certainty and peace of mind" are words used by car dealerships to sell cars, and aren't worth $4k to me, especially when I could use that money for paying down debt or investing.

Hopefully this helps. You may want to consider your financial goals, and how this decision will affect them. My guess is that whichever way you decide, you won't be ruining your future.

Good luck!

Timmmy

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Re: Is this an okay situation to lease a car?
« Reply #6 on: August 20, 2014, 09:17:16 AM »
Thanks for the responses everyone.

Mileage restrictions would not be an issue at all. 

What it boils down to is paying a few extra thousand for certainty and peace of mind.  The total maintenance package here is the main draw.  Knowing the very low probability of problems with a new car with the security that any issues/maintenance will be free is why we think the few thousand might be worth it.

How can you be sure of buying a "very reliable car" on Craigslist?  Especially given the tough winters and terrible road conditions of Cleveland (very harsh/corrosive salts and SO many deep potholes it's ridiculous).  Say you buy a 4k, 10-year old car on Craigslist, and for some reason the transmission fails.  You're immediately screwed financially.  Obviously this is a low-probability event, but it's one that would be potentially disastrous. 

Not wanting to deal with maintenance issues means emergent multi-day repairs vs scheduled convenient single-day maintenance.  You really do have to be at the hospitals almost every day, and medical students are judged over short-term time periods, so it's imperative you don't miss days.

DW and I drive Detroit roads everyday in cars with 170K+ miles each.  You don't need to rent a car for $6k in order to get a reliable car.  Buy a quality used car for around $4k.  That will leave with $2k to deal with emergency repairs and maintenance.  That should be plenty to rent a car for days that the car needs repairs and pay for repairs.  You could also get a taxi on days with car issues. 

Given the fact that you said mileage restrictions won't be an issue.  I'll assume that you aren't driving a lot of miles.  So you really aren't that likely to have large maintenance and repair bills. 

Look for the lowest mileage, manual transmission 4 cylinder Toyota that you can find. 

Plus at the end of 2 years you own a car that's worth something and likely can continue to drive for even longer. 

Leasing is always the most expensive way to own a car.  There's a reason that the dealers/manufacturers market it so strongly. 

RWD

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Re: Is this an okay situation to lease a car?
« Reply #7 on: August 20, 2014, 09:25:18 AM »
How can you be sure of buying a "very reliable car" on Craigslist?  Especially given the tough winters and terrible road conditions of Cleveland (very harsh/corrosive salts and SO many deep potholes it's ridiculous).  Say you buy a 4k, 10-year old car on Craigslist, and for some reason the transmission fails.  You're immediately screwed financially.  Obviously this is a low-probability event, but it's one that would be potentially disastrous. 

Not wanting to deal with maintenance issues means emergent multi-day repairs vs scheduled convenient single-day maintenance.  You really do have to be at the hospitals almost every day, and medical students are judged over short-term time periods, so it's imperative you don't miss days.

In your case of buying a $4k car and immediately the transmission fails you're probably still under your $6k figure for the lease before even counting resale value. And this can be greatly mitigated by doing a third-party pre-purchase inspection. Ask the seller if you can have a shop of your choice look over the car before you buy (the shop will probably charge a small fee for this) and you'll have a pretty good idea if there's any potential disasters waiting to happen.

When your car is in the shop you can just rent if necessary for a day or two and you'll still come out way ahead.

Another Reader

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Re: Is this an okay situation to lease a car?
« Reply #8 on: August 20, 2014, 09:28:39 AM »
Leases are based on the "capitalized value."  That's another word for price. Negotiate the price down and insist you make no down payment.  Try to get the interest rate they are using implicitly  in the calculations reduced.  As an example of the negotiating room, I bought a brand new end of product cycle 2013 Corolla LE with a MSRP sticker of $19,300 for $14,995 at my local dealer in December 2012.  That car should go 150-200,000 miles, but it will be sold as soon as it starts evidencing problems. 

I would not buy used in this situation.  Too much risk of buying someone else's problem and you lack the expertise and confidence to shop used.  Newer used cars are as expensive as new cars if you shop new correctly.  Beaters are for folks comfortable with making repairs and who don't mind taking on the risk of a major mechanical issue.  That's not your wife.

Tetsuya Hondo

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Re: Is this an okay situation to lease a car?
« Reply #9 on: August 20, 2014, 09:50:04 AM »
There's a lot of middle ground between leasing and buying an old beater. I wonder if you'll come out better if you buy something that's not new but not exactly a beater either. Say, a Toyota Corolla that's a few years old - or something else that is likely to hold it's value well and be super reliable - and then sell it in a couple years (probably for just a few grand less than you paid for it) or keep it for another decade and drive the wheels off it.

Personally, I see 80 hour weeks, high stress, and probably doing shifts at odd hours, and think that there's no way I'm going to trust a beater to start up at 3 in the morning on a cold night when I haven't slept in over 24 hours.

Speaking of, I'm always a little baffled by the people on here that claim to buy $2000 cars and have so few problems with them. Every cheap car I've bought has ended up costing me more money than a newer vehicle. Two left me stranded. One time, I had a gun pulled on me while walking to get help. Another time I missed a meeting with a two star Admiral and nearly lost $50K worth of work because of it. So, I'm glad the beater route works for others, but I'm done with it.
« Last Edit: August 20, 2014, 10:28:53 AM by Tetsuya Hondo »

AlanStache

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Re: Is this an okay situation to lease a car?
« Reply #10 on: August 20, 2014, 09:58:18 AM »
I would not buy used in this situation.  Too much risk of buying someone else's problem and you lack the expertise and confidence to shop used.  Newer used cars are as expensive as new cars if you shop new correctly.  Beaters are for folks comfortable with making repairs and who don't mind taking on the risk of a major mechanical issue.  That's not your wife.

Yeah I am not sure the risk reward is in favor of buying a used car.  Think about how having 0.4% more debt in two years on top of your (I assume) large student loans will look.  You would be paying the lease out of pocket or with borrowed student loan money?  $hit happens and if not having to think about what you will do if there is car problems helps you two get through this then that could be worth some money too.  It seems like you understand leasing will cost more (most likely) but if you are willing to pay that premium it does not seem like a stupid decision. 

Just dont let this become a habit :-)

rmendpara

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Re: Is this an okay situation to lease a car?
« Reply #11 on: August 20, 2014, 10:11:58 AM »
Hi everyone!  First post here.

My fiancee is in medical school for two more years and needs a car to drive to various hospitals in the Cleveland area (harsh winters, poor road conditions).  These two years will be extremely busy and stressful (80+hrs/week), so she really does not want to deal with maintenance issues.  After these two years, both of us will be beginning residency in an unknown location, so we may (Durham, NC for example) or may not (Boston/NYC/SF) need a car in 2 years.

Right now Toyota is offering a lease for their end-of-season 2014 Corollas at $2k downpayment and $160/month, it will end up around $6k total for the 2-year lease.  Importantly, they offer a full maintenance package inclusive in that $6k price.

I know car leasing is usually a terrible financial decision, but in this situation, it seems to make sense:
Efficient reliable car
Fairly cheap cost of $6k
Full maintenance included
Good chance we only need a car for 2 years.

What do you all think?  Thanks!

Financially, you are likely to lose by leasing.

Of course, we can't predict the future.

Your example is not apples to apples. You are comparing leasing a new car vs buying an old car. Obviously the new car is orders of magnitude less likely to have any issues.

Perhaps you value convenience and peace of mind? In that case, go for it. So long as you are meeting your financial goals, you can decide which luxuries to endulge... whether it's designer clothing or a car lease, or both, it's your decision.

Some of us would place greater value on a few extra thousand $ in our accounts after the 2 years, while you may value the peace of mind more. This is subjective, so there's no right or wrong decision, necessarily.

duke09hms

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Re: Is this an okay situation to lease a car?
« Reply #12 on: August 20, 2014, 10:29:55 AM »
Thanks for all the input everyone.  I think we are leaning towards leasing a Corolla for the reliability issues given what the next two years will look like for her.  We are actually in different cities (I can walk to my hospitals), so it'd be better if she had that security knowing the car will be taken care of.  Definitely will try to bargain away the down-payment.

We're cognizant of the probable slight financial hit of ~2k but think it's worth it.  She'll have racked up 150k in med school loans by graduation anyway.  Fortunately, med school is costing me nothing (actually making 32k/year from it), and between the salary of two resident physicians (~100-120k), we do plan to pay off all her med school debt by the time residency is complete.
« Last Edit: August 20, 2014, 10:32:37 AM by duke09hms »

duke09hms

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Re: Is this an okay situation to lease a car?
« Reply #13 on: August 20, 2014, 10:31:29 AM »
Leases are based on the "capitalized value."  That's another word for price. Negotiate the price down and insist you make no down payment.  Try to get the interest rate they are using implicitly  in the calculations reduced. 

This sounds very interesting.  Can you elaborate at all or provide further details?  Thanks!

lackofstache

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Re: Is this an okay situation to lease a car?
« Reply #14 on: August 20, 2014, 10:42:23 AM »
With all you've said, I'd probably buy a $6-10k, which would allow me to keep it longer than two years if necessary, but also allow me to sell it for probably $3-6k in two years if I no longer need it.

unpolloloco

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Re: Is this an okay situation to lease a car?
« Reply #15 on: August 20, 2014, 11:01:40 AM »
I'd reiterate the point to check on mileage limits.  Cleveland has hospitals everywhere, so if she's rotating, she could be going to one hospital 30 miles east one day and 30 miles west the next.  This racks up miles extremely quickly.  Also, damages are another concern.  Cleveland drivers are not exactly the best and you have a good chance of them not stopping if they're at fault and they have an option to continue on, putting you with the responsibility to fix damages that you might not with a car you own.  Also, same goes for pothole damages!

Not to say that leasing doesn't necessarily make sense - just saying that you should look at other options too (esp. lightly used - a 5-year auto loan from your bank for $14k equals about the same payment over 2 years as the lease FYI - which is about enough to buy a NEW compact car and more than enough to buy a lightly-used one)

MountainFlower

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Re: Is this an okay situation to lease a car?
« Reply #16 on: August 20, 2014, 11:26:56 AM »
I think Ford and Chevrolet are offering 0% financing right now..for a crazy 6 year term even!  I'd choose that over a lease any day.  At least you have a car at the end of two years that you can keep or sell.  You don't have to take the 6 year term, but why not if it's 0% interest?

KBecks2

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Re: Is this an okay situation to lease a car?
« Reply #17 on: August 20, 2014, 11:29:38 AM »
You can get by on owning a used car.  If you have cash, pay cash for that car.  Listen to a little Dave Ramsey.  150k in debt, what's another 2k?  What the heck? 

If the car has to go to the shop, then you ask a friend for a ride.  You rent a car, you ask the service shop for a loaner.  You work it out.

But find a mechanic and buy a good car.  Take care of it with routine matinenance and you will probably be fine.  In cold weather, get it a new battery and make sure the tires are good (replace the tires when they are worn).   It's just not that difficult to keep a car running.


rubybeth

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Re: Is this an okay situation to lease a car?
« Reply #18 on: August 20, 2014, 11:46:48 AM »
duke09hms, you are new to the forum so consider this your first official MMM FACEPUNCH! You don't lease a car under any circumstances, ever. Seriously? You buy a reliable used car, and if you don't have experience buying a used car, get some experience, and quickly. Look up models in your price range with Consumer Reports, stick with reliable models. 'Peace of mind' is crap and not a good reason to get a new car. I drive a 2001 Acura TL (nice car, much nicer than I need) and though it has 120,000+ miles on it, it's been totally reliable for the years I've owned it. DH drives a 2005 Ford Focus, also with no major mechanical issues, purchased with about 60,000+ miles. These were purchased with cash, no loans, but we own them free and clear and could sell either of them for about $4,000 today if we wanted to.

Don't think she 'deserves' a leased new car (she doesn't), don't make excuses about it being good financially (it's not), plus with med school, I'm guessing you both have considerable debt (like $200,000+?).

Timmmy

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Re: Is this an okay situation to lease a car?
« Reply #19 on: August 20, 2014, 12:17:55 PM »
I think Ford and Chevrolet are offering 0% financing right now..for a crazy 6 year term even!  I'd choose that over a lease any day.  At least you have a car at the end of two years that you can keep or sell.  You don't have to take the 6 year term, but why not if it's 0% interest?

Because to get 0% you have to buy a new car and you'll take a pounding far worse than any interest in the first year day of depreciation once it leaves that new car lot. 

svi

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Re: Is this an okay situation to lease a car?
« Reply #20 on: August 20, 2014, 12:40:11 PM »
I think Ford and Chevrolet are offering 0% financing right now..for a crazy 6 year term even!  I'd choose that over a lease any day.  At least you have a car at the end of two years that you can keep or sell.  You don't have to take the 6 year term, but why not if it's 0% interest?

Because to get 0% you have to buy a new car and you'll take a pounding far worse than any interest in the first year day of depreciation once it leaves that new car lot. 

This is true, and under these circumstances between buy new for 2 years or lease for 2 years lease makes more sense.

In any other circumstance buying a 6k car and then driving the crap out of it makes the most sense, however i don't think a lot of people understand what it is like to be a med student. She is not going to have time to deal with car issues. Most med students don't even have the time to eat and sleep like normal humans, and a $6000 car is guaranteed to have maintenance issues at some point.

A reasonable alternative was mentioned by Tetsuya Hondo. Do the math: would interest expense on a used car + further depreciation over 2 years be more than 6k? Then lease might be the way to go. However take into account the possibility of you needing a car during residency, in which case leasing does not make sense at all.
« Last Edit: August 20, 2014, 12:42:04 PM by svi »

AlanStache

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Re: Is this an okay situation to lease a car?
« Reply #21 on: August 20, 2014, 12:50:53 PM »

frugal-vs-cheap

Think long term & big picture.

If/When something goes wrong I would rather tell my new boss the lease broke down then the 2002-P.O.S.

That said buying a slightly more expensive car (15k?) with the option to sell or keep in 2 years might get you comparable reliability, but without the the worry of millage limits or repairing scratches/dings or mandatory (?) oil changes.

If leasing and being 2-4k worse off over two years helps her do better in residency then maybe it was well spent - big picture.

Timmmy

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Re: Is this an okay situation to lease a car?
« Reply #22 on: August 20, 2014, 12:51:47 PM »
a $6000 car is guaranteed to have maintenance issues at some point

Excuse me?!?!

Not in the first two years it isn't.  I bought a pickup truck for $700 and drove it for more than 2 years without "maintenance issues".  It needed some repairs along the way but nothing costing more than $600 total.  I got all $700 back when I sold it.  What the heck are you guys doing to your cars to destroy them so rapidly? 

My suggestion was to buy a $4k car and keep $2k around for repairs and emergency travel.  That's more than reliable enough for a med student with hundreds of thousands of dollars in debt. 

The Kia my wife has been driving for the last 1.5 years has over 180k miles and since we bought it has needed nothing other than oil changes and wiper blades.  We paid $1800 for it.  She has a ridiculous commute too, so she racks up serious mileage. 

I'm all for luxury and a false sense of security when someone can afford it but her hair is on fire with student loan debt. 

eil

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Re: Is this an okay situation to lease a car?
« Reply #23 on: August 20, 2014, 12:54:11 PM »
Let's see here..

You can spend $6,000 on a new car that you'll own for 2 years and not get any money out of at the end.

Or you can spend $6,000 or so on a decent used car that you can likely sell for at least $4,000 if you don't need it afterward, or keep it free and clear of any further payments if you do.

When you figure in $160,000 of debt, I guess throwing away a few extra thou here and there is no big deal.

BeardedLady

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Re: Is this an okay situation to lease a car?
« Reply #24 on: August 20, 2014, 01:13:04 PM »
duke09hms, you are new to the forum so consider this your first official MMM FACEPUNCH! You don't lease a car under any circumstances, ever. Seriously? You buy a reliable used car, and if you don't have experience buying a used car, get some experience, and quickly. Look up models in your price range with Consumer Reports, stick with reliable models. 'Peace of mind' is crap and not a good reason to get a new car. I drive a 2001 Acura TL (nice car, much nicer than I need) and though it has 120,000+ miles on it, it's been totally reliable for the years I've owned it. DH drives a 2005 Ford Focus, also with no major mechanical issues, purchased with about 60,000+ miles. These were purchased with cash, no loans, but we own them free and clear and could sell either of them for about $4,000 today if we wanted to.

Don't think she 'deserves' a leased new car (she doesn't), don't make excuses about it being good financially (it's not), plus with med school, I'm guessing you both have considerable debt (like $200,000+?).

^This

It seems you are not looking for advice, only for people to validate your decision. You have offered no alternative you and your fiancee would be comfortable with. If you want to lease the new car, go do it. But you will have a tough time convincing this forum to agree that it is a good financial decision.

Buying a used car does not have to mean buying a "beater," which I consider to be an unreliable rustbucket of a vehicle. Look for used cars in good condition that have been taken care of. Have the car checked out by someone who knows what to look for if you are not willing to get knowledgeable yourself. They do exist in the $2-4K range, but maybe a $2K car is not for you if you don't want to do the legwork. This does not mean you need to go to the opposite extreme by leasing a new car. Something that will hold its value may make the most sense for you so you can recoup close to whatever amount you do decide to spend. Usually this means a 5- to 10-year-old car. Good luck!

svi

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Re: Is this an okay situation to lease a car?
« Reply #25 on: August 20, 2014, 01:29:26 PM »
a $6000 car is guaranteed to have maintenance issues at some point

Excuse me?!?!

Not in the first two years it isn't.  I bought a pickup truck for $700 and drove it for more than 2 years without "maintenance issues".  It needed some repairs along the way but nothing costing more than $600 total.  I got all $700 back when I sold it.  What the heck are you guys doing to your cars to destroy them so rapidly? 

My suggestion was to buy a $4k car and keep $2k around for repairs and emergency travel.  That's more than reliable enough for a med student with hundreds of thousands of dollars in debt. 

The Kia my wife has been driving for the last 1.5 years has over 180k miles and since we bought it has needed nothing other than oil changes and wiper blades.  We paid $1800 for it.  She has a ridiculous commute too, so she racks up serious mileage. 

I'm all for luxury and a false sense of security when someone can afford it but her hair is on fire with student loan debt.

That does not contradict what i said at all. If you have time to deal with inevitable small issues that pop up (they did pop up for you as you indicate) then a 5-7k vehicle is the smartest way to go hands down. But consider the fact that someone who works 70+ hours a week, weird hours and weird places does not have the same luxury of time and flexibility.

This person needs a minimal maintenance appliance for 2 years. The question is does she want to rent this appliance or buy one and resell it later?

 I personally would go with a 2-3 y/o 13k corolla or civic that already took the depreciation hit and then resell it for 10-11k when i'm done. What I would not do if i was in that position is gamble on a $4k car of unknown provenance and unknown maintenance record without being ready to deal with delayed maintenance and issues that a car like that is going to have.

Timmmy

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Re: Is this an okay situation to lease a car?
« Reply #26 on: August 20, 2014, 01:46:13 PM »
a $6000 car is guaranteed to have maintenance issues at some point

Excuse me?!?!

Not in the first two years it isn't.  I bought a pickup truck for $700 and drove it for more than 2 years without "maintenance issues".  It needed some repairs along the way but nothing costing more than $600 total.  I got all $700 back when I sold it.  What the heck are you guys doing to your cars to destroy them so rapidly? 

My suggestion was to buy a $4k car and keep $2k around for repairs and emergency travel.  That's more than reliable enough for a med student with hundreds of thousands of dollars in debt. 

The Kia my wife has been driving for the last 1.5 years has over 180k miles and since we bought it has needed nothing other than oil changes and wiper blades.  We paid $1800 for it.  She has a ridiculous commute too, so she racks up serious mileage. 

I'm all for luxury and a false sense of security when someone can afford it but her hair is on fire with student loan debt.

That does not contradict what i said at all. If you have time to deal with inevitable small issues that pop up (they did pop up for you as you indicate) then a 5-7k vehicle is the smartest way to go hands down. But consider the fact that someone who works 70+ hours a week, weird hours and weird places does not have the same luxury of time and flexibility.

This person needs a minimal maintenance appliance for 2 years. The question is does she want to rent this appliance or buy one and resell it later?

 I personally would go with a 2-3 y/o 13k corolla or civic that already took the depreciation hit and then resell it for 10-11k when i'm done. What I would not do if i was in that position is gamble on a $4k car of unknown provenance and unknown maintenance record without being ready to deal with delayed maintenance and issues that a car like that is going to have.

Yes I had maintenance on a flipping $700 truck. 

Read a little further.  DW and I bought a Kia for $1800 and have had zero maintenance issues.  I could buy two more as spares and still come out at less than $6k. 

If I bought a $6k car I'd feel like a king. 

I think it's worth recognizing that this person isn't FI.  They are flat broke.  They owe crap loads of money on student loans. 

It's obvious that the OP is going to lease the car, so... I'm out...

Christof

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Re: Is this an okay situation to lease a car?
« Reply #27 on: August 20, 2014, 03:23:56 PM »
Don't you in the US have insurances that cover one or two years of basic maintenance even on used well-maintained cars? Here in Germany that's typical an option when buying from a dealership.

hexdexorex

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Re: Is this an okay situation to lease a car?
« Reply #28 on: August 20, 2014, 04:02:47 PM »
The lease def is not better than a craigslist car financially.

Just get a Toyota that's 10 years old...it wont have major issues if you take it to 2 different mechanics and get it checked out.

Free maintenance on a brand new car is obviously included .....it wont have issues.

This is my experience...got a $1800 toyota on craigslist 6 years ago...spent around 300/year maintenance. A quick check on craigslist shows cars in worse condition but the same year/brand selling for 1500-3000
« Last Edit: August 20, 2014, 04:04:22 PM by hexdexorex »

greieras

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Re: Is this an okay situation to lease a car?
« Reply #29 on: August 20, 2014, 05:24:52 PM »

Importantly, they offer a full maintenance package inclusive in that $6k price.


Read the details on that maintenance package... it basically includes up to 5 oil changes/ tire rotations, period. How much is that worth for a basic vehicle like a Corolla? $200? The labels ('ToyotaCare', 'full maintenance package') sound much better than what's actually included - congrats to Toyota's marketing (I guess...)!

http://www.toyota.com/content/ebrochure/toyotacare.pdf


greieras

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Re: Is this an okay situation to lease a car?
« Reply #30 on: August 20, 2014, 05:34:44 PM »

Free maintenance on a brand new car is obviously included .....it wont have issues.


Free maintenance for x years/miles, while becoming more common, is not offered by all car companies/ all models (it is NOT warranty, it just covers regular maintenance visits, so no charge for the owner).

Not saying this is a reason to purchase a car, just explaining what it is/ is not.

Goldielocks

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Re: Is this an okay situation to lease a car?
« Reply #31 on: August 20, 2014, 05:47:20 PM »

Free maintenance on a brand new car is obviously included .....it wont have issues.


Free maintenance for x years/miles, while becoming more common, is not offered by all car companies/ all models (it is NOT warranty, it just covers regular maintenance visits, so no charge for the owner).

Not saying this is a reason to purchase a car, just explaining what it is/ is not.

This +1

Even if it includes a warranty plus free maintenance, what I don't understand is why you want a dealership maintenance package if you dislike having the incovenience of repairs.  (your OP mentioned stress and hassle as a key concern).

I have observed that the maintenance and warranty packages require A LOT of appointment and trips to the dealer, at inconvenient times, and often at a distance from your residence, for the regular "required" maintenance.

If you get a 4 yr old car, you can likely only have a couple of "regular" oil changes and filter services, brake checks, etc at YOUR convenience, beside your work, house, drive up on demand, etc.  And NO other trips for service.

If you are worried about repair downtime, simply get an Automotive club insurance that includes towing, pickup, and even a rental car option.   Easy peasy.

You are still likely to not spend $6k over 2 years, if you don't go extravagant on the car, and resell it at only 6 yrs old...

Goldielocks

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Re: Is this an okay situation to lease a car?
« Reply #32 on: August 20, 2014, 05:48:20 PM »
Okay situation to lease a car:

You own a business, and the lease expenses are fully charged to the business expenses, and the depreciated cost allowance and tracking required by owning is quite a chore or lesser value to you.

Christof

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Re: Is this an okay situation to lease a car?
« Reply #33 on: August 21, 2014, 02:15:27 AM »
I own a business and leasing was the most expensive option... The financially best option was to finance on a low interest loan, investing the 20% VAT payback at a higher return and use these gains to pay interest.

frugaliknowit

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Re: Is this an okay situation to lease a car?
« Reply #34 on: August 21, 2014, 09:14:26 AM »
Less than optimal.

If the concern is reliability, buy a newer used model (as new as you can afford).  A lease is nothing but a loan against steep depreciation (all in the interest of the dealer) and a profit margin.

SunshineGirl

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Re: Is this an okay situation to lease a car?
« Reply #35 on: August 21, 2014, 09:17:07 AM »
It makes very good sense to me.