Thoughts on leasing??

czirrfb

So then in reality leasing is no different than buying because your credit will get screwed either way if you cant pay for the car anymore. Accept with leasing your not paying to own.

Sounds like buying is the better option...

ElVee

True, if you miss payments and a collection agency is called in to collect, that's going to tank your credit very fast.

In the end, don't buy or lease beyond what you can afford.

With a lease, you're tied in (moreorless) for the lease term, but with a bought car, you're tied in with the loan as well.

You can break a lease and pay penalties up the wazoo, but you can't easily break a loan or purchase; you're going to be out a lot of money.

Best case, you sell the car to someone else who takes over the loan and you pay them the difference between what you owe on the car and what it's worth. Google "upside-down car loan" for more information on that. Basically, when you buy and drive a car off the lot, it immediately depreciates quite a bit. It's not worth what you owe on the car loan. This means if you want someone else to take the car off your hands, you're going to actually have to PAY them (or pay a huge chunk of the loan right away to get it in line with the value of the car).

For a couple years, you'll likely be upside-down on a purchase car loan. This is why a lease makes more sense on short term new car acquisitions. Eventually, you'll pay down the loan and owe far less, but the car will then be worth more than what you owe. For instance, 6 years into your loan in 2020, your Z may be worth $16,000, but you only owe $1000 left on it. That's good!

Yes, it takes time to wrap your head around all of this. At the end of the day, don't commit to more than you know you can afford.

synolimit

Only if you can't give what's still owed. Whether a lease or a buy, if you walk into a dealer and say I can't afford the payments, will you buy it off me? If you owe XXXXX on the car and the dealer will give you XXXXX you need to either come up with the difference to pay it off or maybe some how your ahead and they give you a check.

Worst case in a lease or a buy if you can't afford the car anymore and you're worried about credit, go trade it in on a car that's way cheaper and for what you can afford. You'll probably have a bunch of negative equity but getting a cheaper car for way more than it's worth but you can afford it, is better than faulting on a loan.

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