FMOOD 0095: Why I Will Never Lease a Vehicle - a podcast by Tom Merlino | Tom is inviting you to follow him on his journey to get out of debt and get into prosperity.

It's a question that has been asked over and over again, and will likely continue to be asked. That question is this: is it better to buy or lease a vehicle? I'll tell you exactly why I will never lease a vehicle. I never have, and I never will. 

 

For starters, it's against my personality type. I don't like a company or any other entity for that matter to have control over me. Leases have too many restrictions. When you lease a vehicle, you have to be careful not to drive over your mileage allowance. If you do, you'll need to pay per mile over the limit. If the dealership determines that your leased vehicle is reflecting anything more than what they consider normal wear and tear, you will pay even more money at the end of your lease. You will also have your leased vehicle used as leverage to keep you in a leased vehicle with that same dealership over and over again, and they will continue to tell you the same lie. That lie is that a lease is less expensive than buying a car.

 

While it is true that the lease payment itself will almost always be less than what you'll pay when you purchase a vehicle and have to make payments (assuming no down payment), the truth in numbers does tell a more detailed story. When you lease a vehicle, you'll likely need to put a down payment on the lease. You'll pay for the lease at a certain fixed cost per month for a set amount of time, usually thirty-six months. Once your lease is finished, you drive the vehicle back to the dealership to return it. Even if we assume that you stayed in the realm of your mileage restriction and returned the vehicle clean and clear of anything outside of normal wear and tear, you still lose that vehicle. You never owned it in the first place.

 

On the other hand, if you purchase a vehicle, even by taking out a forty-eight month loan, at the end of the loan you own the vehicle. You can sell the vehicle outright or trade it in for another vehicle. If you total the amount that you've paid over the years for a lease (including the down payment) and average that number per year and per month, you'll have one number. If you total the amount that you've paid over the years for a purchased vehicle and average that number per year and per month, you'll have another number, and most likely that number may be higher.

 

Don't forget that you have a vehicle that you now own at the end of the loan if you purchased the vehicle instead of leased it. The value of that vehicle must be taken into account and deducted from the amount that you've spent over the years for the purchase since you now own the property. After deducting this amount and getting your average cost over time, it will almost always work out to show the math behind what I'm saying: a lease will cost you more money when compared with purchasing a vehicle, even if you have to take out a loan in order to do it.

 

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