First Car: Buy or Lease?

[macdo]

Leasing, you are financing the depreciation on a new car, and cars depreciate the minute you drive one off the lot. But, you are essentially buying the use of a car with replacement simple if it fails. Plus you can get tax back if it is a business.

What we do, lease the car my wife depends on for her business. Other cars we buy for cash (no loans) and run into the ground. Best of both worlds.

 

[Charlie_Harper]

Leasing is ALWAYS more expensive than buying. I have analyzed this kind of stuff for 30 years and the answers today are the same as always.

 

[bmilla35]

I'm impressed and thankful for all the information that has been given. I really appreciate it!

Just so it's known, my age is 23 (I have a feeling i'm older than people imagined).

I went back to my usual bank, PNC, who informed me that they DO finance used vehicles, but they must be no older than 8 years and no more than 80,000 miles. I applied for a blank check loan that will last 30 days should I decide to use it.

I also joined a credit union, should I decide to finance. Yes, that means I am still considering just buying a car in cash (or getting a personal loan where I could pay off the interest in months)! It's hard because I like having nice, flashy things. Sometimes I have to be a realist, and just come to know I don't really NEED a nice vehicle. It's definitely a matter of wanting one. Still, I cant decide. I'm searching through Craigslist, eBay, and any local autotraders I can find!

ETA: I forgot a few things. The primary use of whatever vehicle I decide to buy will be to travel to and from work and school. My work is only 3 miles away, but come next fall i'll have to go back to State College, which is a solid 130 miles. I'll have to travel to and fro many weekends.

Hopefully I didn't forget anything else...

 

[hung-solo]

BMilla

find an older civic or yota. even a 4 banger tacoma. the older the japanese vehicle they better quality they are. i have an 02 double cab tacoma 4x4 with v6 maybe up for sale all service records, clean, etc. would make an AWESOME first vehicle. it has a tool box, bed extender, towing package. everything you need in a first vehicle. the most reliable vehicle i have ever owned. and i probably shouldnt get rid of it

here is a pic i took last year or year before. looks the same. i keep it clean.

 

[Liquidm1980]

the first dealer car i bought was my 2007 bmw 3. they were pushing for me to lease it. so i looked into the numbers. based on my calculations it i could sell my car in three years for over 17k it made since to buy it. i asked if they had any three year old cars for 17k.i did go to a credit union first and secured 4%. they said no so i bought. another benefit to buying is you can keep the car as long as you like. i still have the car today, it still looks and drives amazing so i dont plan to get rid of it anytime soon.

 

[bmilla35]

BMilla

find an older civic or yota. even a 4 banger tacoma. the older the japanese vehicle they better quality they are. i have an 02 double cab tacoma 4x4 with v6 maybe up for sale all service records, clean, etc. would make an AWESOME first vehicle. it has a tool box, bed extender, towing package. everything you need in a first vehicle. the most reliable vehicle i have ever owned. and i probably shouldnt get rid of it

here is a pic i took last year or year before. looks the same. i keep it clean.

I still might. My dad still drives a beater Toyota that has like 230k miles and it runs soooo smooth. Unfortunately, most cars like that have already gone off the market around here. It seems everyone wants a car like that these days. I really want something that I know will last me a few years.

 

[Bob W]

I went back to my usual bank, PNC, who informed me that they DO finance used vehicles, but they must be no older than 8 years and no more than 80,000 miles.

With older cars, banks often won't do full-term loans, and you get totally boned with sky-high interest rates.
I've found the best financing options through a credit union rather than big-name banks.

It's hard because I like having nice, flashy things.

There's no sense in wasting money on a vehicle that you don't really like, especially considering the potential length of ownership (people keep cars longer now than in the past). But you still have to realistic about what's available in your price range, and that includes interest rates, maintenance, fuel economy, and insurance.

Regarding insurance, I've found the best prices and service through independent agents who can compare prices and coverage between many different insurance companies. Visit your agent soon, before you get much farther along shopping. They may even steer you towards a particular vehicle model known for low rates, and that hopefully isn't completely unappealing. When you're getting serious about a particular vehicle, write down the VIN and call the agent for an exact insurance quote before you drive it home.

Happy shopping!

 

[CWL]

Leasing only really makes sense if you can write off the costs as business expenses, or if you can afford a high standard of living. Then you can drive a new car every 12-24 months.

In your early 20's and still a student, a lease will be nothing more than a burden and can even potentially screw-up your credit scores before your real life even starts.

 

[Bo T]

lots of good info here...

i am debating selling my truck. she has 187k miles and has been great to me.. just not comfy to drive long distance and i need more storage room for trips and future children. its paid for and i have the title. great condition the miles are mostly highway.

my question is since its related to this subject - if i were to sell out right and say i get $9K for it. so i have 9k in my "pocket" and i get pre approved for a loan for however much... the cost of the vehicle i want is $19K. how would you approach the seller to get them to reduce the price. is it better to tell them upfront that you have 9k to put down in cash or wait for them to hit their rock bottom price and then ask for it to be lower bc you plan on paying 9k down?? its been years since i bought any vehicles

You have your ride. You don't have to deal. Determine several vehicles that would work for you. Figure out what you think is fair for both parties. Get your financing set up with your bank or credit union (they will give you the best rates).
Walk in, make an offer. They will probably refuse. Walk out but leave your number.
Check out the other dealers and other vehicles. The first new vehicle I bought was a Nissan PU. I looked at the Toyota and Mitsubishi PUs. I went in, made an offer on the Mitsubishi...the salesman refused and countered $2k higher. I walked out, went to the Nissan dealer a couple days later, made them an offer based on the advertised sales price from a dealer @ 150 miles away. Drove home in my new truck. A few weeks later the Mitsubishi salesman called to say they decided to accept my offer.
Your financing shoud be good for 30 days and if things don't work out the first time through. Recalculate what you think is fair and start over.

 

[bmilla35]

Wellllll....

I've been approved for a check ready loan should I decide to buy a more expensive vehicle, and also joined a credit union!!

That being said, I found a possible lead. A friend told me the guy who owns a house where he does yard work is selling a 2006 Taurus with 100k miles on it for $1500. It hurts to do but as long as it runs well I think i'm gonna bite the bullet and avoid the loan and just pay cash. That way I can save for a better vehicle further down the road, or who knows, maybe a bike?!

 

[JPD1998]

Wellllll....

I've been approved for a check ready loan should I decide to buy a more expensive vehicle, and also joined a credit union!!

That being said, I found a possible lead. A friend told me the guy who owns a house where he does yard work is selling a 2006 Taurus with 100k miles on it for $1500. It hurts to do but as long as it runs well I think i'm gonna bite the bullet and avoid the loan and just pay cash. That way I can save for a better vehicle further down the road, or who knows, maybe a bike?!

Sounds like a good idea.
Good luck with it , I've heard they're good cars.

 

[lanceman193]

Buy either a used toyota or honda or find the best convertible Mustang or Camaro in your price range. If you can find a nice one for 10K or less, drive it for 10 years, take care of it, and sell it for close to what you pay for it. This may only work if you live down south, however.

 

[Liquidm1980]

Leasing only really makes sense if you can write off the costs as business expenses, or if you can afford a high standard of living. Then you can drive a new car every 12-24 months.

In your early 20's and still a student, a lease will be nothing more than a burden and can even potentially screw-up your credit scores before your real life even starts.

good advice

 

[bmilla35]

Sounds like a good idea.
Good luck with it , I've heard they're good cars.

Thanks!

Buy either a used toyota or honda or find the best convertible Mustang or Camaro in your price range. If you can find a nice one for 10K or less, drive it for 10 years, take care of it, and sell it for close to what you pay for it. This may only work if you live down south, however.

I was trying, but this fell into my lap. Plus most GOOD deals are already taken in this area on used hondas and toyotas. I would LOVE an older Mustang, like the 89-90 5.0 (no one else seems to like them), but being I drive through the mountains in the winter time to get to school a mustang just wouldnt suffice. It's no secret they aren't the best in snow..

good advice

Yeahhhh I can't afford a high standard of living :/

 

[Sid Post]

Maintence shouldnt be too much of an issue
. Im lucky enough to have plenty of mechanically inclined people around me
. However, I will look in to loans at other banks. Does anyone know if all banks only offer auto loans on new vehicles?

I never even thought about buying a vehicle without a loan. I'm definitely willing to buy oitside of a dealer, though

I'm guessing you bank at a little regional bank. I have had no issue getting a loan on a used vehicle with major banks, The Credit Union offered the best deal and was easy to work with.

Stay away from dealer financing. There's more profit and mark up there then there is on the vehicle itself. You will need some money down but, generally less at a credit union with a good payment history and job history. You can get good cost effective used transportation for ~$4,000 so shop wisely and carfully. You don't need to impress anyone while your putting yourself through school. When you graduate and have a good job, that's the time to consider a nicer used car, pickup or, SUV.

 

[Sid Post]

BMilla

find an older civic or yota. even a 4 banger tacoma. the older the japanese vehicle they better quality they are. i have an 02 double cab tacoma 4x4 with v6 maybe up for sale all service records, clean, etc. would make an AWESOME first vehicle. it has a tool box, bed extender, towing package. everything you need in a first vehicle. the most reliable vehicle i have ever owned. and i probably shouldnt get rid of it

here is a pic i took last year or year before. looks the same. i keep it clean.

I wish I could find something like that.

 

[Magnaminous_G]

First of all, this is the WRONG PLACE to ask for financial advice. Your talking about a forum [EDIT: a forum with a a lot of folks encouraging each other to spend more on knives... to the point of addiction sometimes]. Not to insult anybody, but it's the damned truth, and needs to be said since you are a young man asking for financial advice. This is the WRONG PLACE to ask for it. There are places on the internet where financially-savvy people congregate and help each other. This is not one of them. Now then, if you've got a knife that needs identifying, or if you need to know how a certain year's model of a certain Buck knife performs while batonning through a certain material type... this is THE only place to ask.

But... if you insist on advice, then I'll shoot (although you should take my advice with a big grain or two of salt, too!): I think you are wise to consider that Taurus. First, ask the owner why he's selling it and why is the price so low? Is there a major issue with it? Test drive it. The best way to get a sense of the condition of the car if you are not a mechanic is to listen to it. Start it up, let it idle for a while, drive it around the block, try the brakes out. How does the car sound? If it sounds good and smooth, it usually is. If it is making weird noises (grinding, squealing, knocking, etc.), something is wrong. Before you buy it, google repair shops near your zipcode and choose one with a good reputation and good reviews. Take the car there and get an honest opinion on any mechanical and electronic problems (burning oil? transmission bad? engine light always on? brakes still good? tires still got tread?), before you buy. If your $1500 car will need new brakes and tires within a few months, then it's actually a $2500 car. If you decide to buy, resolve to take care of it: let it warm up in the morning for 5 minutes before you drive, go easy on the brakes, change the oil every 3k miles, get a tire-pressure gauge and check the tire-pressure once in a while and make sure it's correct, check the oil every two or three days for the first week or so so make sure it's not burning up oil and/or the oil isn't getting mucked up fast.

But by spending a few more G's, you'll get a much better car. You mentioned that your grandma was willing to help you out. Is she willing to give you a loan instead of cosigning a loan? If you can borrow 2K from your grandma and spend $3,500, you'll get 10x the car. Plus, you can pay grandma back as you are able without hurting your credit score.

Finally: don't get a loan and always live below your means. Example: just because you've got a little extra cash this week and you can afford Velveeta & Shells and Heineken, doesn't mean you should buy it. Stick with Mac & Cheese and Miller and save that extra bit of cash for another day when you actually need it for something. It helps to have a goal to save money. Start small: save $50 a month. That's it. After six months, you'll have $300 in the savings account. Any questions, just ask!

 

[Guyon]

I've been enlightened.

 

[Maniacal Pete]

Your <sic> talking about a forum full of mostly...errr... hmm... less-than-middle-class rural Americans (didn't offend anyone, I hope?) spending waaaay too much on a knife hobby. Not to insult anybody, but it's the damned truth, and needs to be said since you are a young man asking for financial advice.

Where did you come up with that little nugget?

 

[KaosX]

First of all, this is the WRONG PLACE to ask for financial advice. Your talking about a forum full of mostly...errr... hmm... less-than-middle-class rural Americans (didn't offend anyone, I hope?) spending waaaay too much on a knife hobby. Not to insult anybody, but it's the damned truth, and needs to be said since you are a young man asking for financial advice. This is the WRONG PLACE to ask for it. There are places on the internet where financially-savvy people congregate and help each other. This is not one of them. Now then, if you've got a knife that needs identifying, or if you need to know how a certain year's model of a certain Buck knife performs while batonning through a certain material type... this is THE only place to ask.

But... if you insist on advice, then I'll shoot (although you should take my advice with a big grain or two of salt, too!): I think you are wise to consider that Taurus. First, ask the owner why he's selling it and why is the price so low? Is there a major issue with it? Test drive it. The best way to get a sense of the condition of the car if you are not a mechanic is to listen to it. Start it up, let it idle for a while, drive it around the block, try the brakes out. How does the car sound? If it sounds good and smooth, it usually is. If it is making weird noises (grinding, squealing, knocking, etc.), something is wrong. Before you buy it, google repair shops near your zipcode and choose one with a good reputation and good reviews. Take the car there and get an honest opinion on any mechanical and electronic problems (burning oil? transmission bad? engine light always on? brakes still good? tires still got tread?), before you buy. If your $1500 car will need new brakes and tires within a few months, then it's actually a $2500 car. If you decide to buy, resolve to take care of it: let it warm up in the morning for 5 minutes before you drive, go easy on the brakes, change the oil every 3k miles, get a tire-pressure gauge and check the tire-pressure once in a while and make sure it's correct, check the oil every two or three days for the first week or so so make sure it's not burning up oil and/or the oil isn't getting mucked up fast.

But by spending a few more G's, you'll get a much better car. You mentioned that your grandma was willing to help you out. Is she willing to give you a loan instead of cosigning a loan? If you can borrow 2K from your grandma and spend $3,500, you'll get 10x the car. Plus, you can pay grandma back as you are able without hurting your credit score.

Finally: don't get a loan and always live below your means. Example: just because you've got a little extra cash this week and you can afford Velveeta & Shells and Heineken, doesn't mean you should buy it. Stick with Mac & Cheese and Miller and save that extra bit of cash for another day when you actually need it for something. It helps to have a goal to save money. Start small: save $50 a month. That's it. After six months, you'll have $300 in the savings account. Any questions, just ask!

This made me chuckle.

I would recommend that you check out the book "Financial Peace university" by Dave Ramsey. If you're not religious, ignore the religious bits. It's very sound financial advice. The best thing about it is that it offers a gameplan that you can follow. Being young and having fewer responsibilities means you have more leeway to make the plan work in your favor.

My wife and I teach FPU classes (we don't get paid) and the plan has been SOLID for us, but it all depends on the commitment to win.

It's a cheap book and the library probably has it.

depending on your area of pittsburgh we'll have another class in September some time.