I have always thought that leasing a vehicle was a waste of money. As I talk to more and more to people who do lease, I am even more convinced that they are throwing their money right down the drain. I think it works well for people who are not on a tight budget or those who make enough money and are not too concerned how it is spent. For the average John Smith, I think you spend a lot less money owning a vehicle.
I bought an SUV in 2001 and had it paid off about a year and a half later. I was able to do that because I was still living at home and not paying rent. So I just made some huge payments while I could. I always knew that in the long run I would be saving on interest. By paying up the vehicle in about 18 months, I saved over $700 in interest. Of course not everyone can do that but in the end, you are still saving money even if you have a longer loan and own.
I know a lady who spends about $600 a month on leasing. To me that is an outrageous amount of money. These are not necessarily well to people either, so I don’t understand how they have all this extra money to spend on one car. Someone recently said that they like the idea of leasing because they get a new car every two years. I can understand that thought, but she is paying big money to get a new car every two years. It’s like having a constant loan that you never pay up. To me that sounds like a financial burden. I haven’t had a car loan since 2003, which is about six years. I have a very dependable vehicle because I take care of it very well. I bring it in to the shop on a regular basis to keep it in good running condition. I just can’t imagine having a constant loan. Now I own the SUV and I will have it for a while because I have very low mileage on it. Every year I spend about $500 for repairs and maintenance. For some people, that is about two months worth of loans. So they are spending so much more than if they were to own the vehicle. Also, leasers are responsible for some of the repairs. Not all are covered in the plan. So that amount of money plus the loan each month, equals a lot of money. I don’t see where the savings is. My cousin spends about $375 a month to lease. There is also a restriction on how many miles can be driven in a certain amount of time. Many people go over this limit which also adds an addtional charge. From what I hear, it’s not a cheap fee either. Again, it’s a constant payment that never ends.
I’ve always tried to understand the concept of leasing to see if that would be something I might consider. By just talking to a few people and knowing how much they are spending a month, there is no way I would ever go that route. Buying a vehicle and owning it, is so much cheaper in the long run.