Is it cheaper to lease a car or buy a few years old used car and trade it in or sell it to an online place every 7 years? I could be wrong but after the initial 7 years aren't you only paying like $130 a month for cars over a lifetime?
I do like safety features in cars though like backup camera. But I don't know how much more safety features you're need after this? I could be wrong but I don't see anything that significantly improves safety or makes your life significantly easier after this.
I don't really know. Can you please help me? Thank you.
Is it cheaper to lease a car or buy a few years old used car and trade it in or sell it to an online place every 7 years?
byu/ComfortablePost3664 inFrugal
Posted by ComfortablePost3664
22 Comments
Probably works out better to buy a used car and then drive it till the wheels fall off instead of trading it in
I have leased my last 2 cars and have been 100% satisfied with my choice. Could I have found a better deal? Probably. I am not handy around cars, and I want to always have warranty, since my cars always seem to develop issues after 4 years or 100k, while I am still paying my monthly finance fees. I’ve always had 6 year finance terms.
With leasing, I pick my car, then after the term is up, I bring it back and swap for a new one. My current car, a 2024 Sentra SR will be up in October so I’ll bring it in and grab something different. I also have the option to buy out the remainder of my term if I want to own the car.
Now, there are usually limits of miles/kms per year, you cannot modify the car (add a new stereo, body kit etc.)
If you are the kind of person that keeps cars for a long time, buying a used car is a much cheaper option. There’s a couple of things that you need to consider. When you lease a car, typically it comes with a mileage limit, but the dealership will also take care of routine maintenance for you at no extra charge. Also, if anything goes wrong with the car from a mechanical standpoint, you are typically off the hook not paying for that as well. If you have your own car, there’s no mileage limit, but any mechanical issues you would have to fix. If you buy a Toyota or a Honda or a similar reliable type model the chances of mechanical issues early on are slim.
Long story short, much cheaper to buy a used car if you hang onto it for 7+ years. My goal for cars is 10 years.
I’ve leased a car and then bought it out at the end and have been driving it for a long time now (13 years). It spreads out the car payment to help with the monthly cost. You MUST negotiate a good price for the car during the lease phase as that will dictate the buy out cost. The problem with leasing is that you will ALWAYS be over in mileage unless you are retired (no commute) and will get dinged with a big bill at the end if you return it. The dealers use leases to keep you in their product/car line. They tell you to can just roll over your owed miles payment into the next car. This is how you get over your head in car payments
I have leased one car and then bought it at the end of the lease.
It would have been a better financial decision to just finance it in the beginning since we chose to keep the vehicle. One of our sons is driving it now and I am sure someone in the family will have it for at least 10-15 years.
Buy used and drive until the wheels fall off. I mean like a 6 year old car, not a 16 year old car.
7 years is less than halfway through the usable lifespan of the car.
If you can drive your car safely now with the safety features it has now, you can drive your car safely in 10 years.
Safety features sell vehicles. They’re not adding safety features because driving is getting more dangerous. They’re adding them to suckered people into buying cars before they need to
As an accountant, I never recommend leasing a vehicle unless you own a business or drive it for business and can claim some tax reductions, a lease ties you up for max mileage per year, dealer servicing etc, not to mention you forever have debt in the form of car payments. I don’t understand you motivation for getting a new car every 7 years, what’s the magic of 7? I bought a new car in 2011, I’m still driving it.
To answer your question, yes, a used car will be cheaper than a lease, make sure you get it from a trusted source, and consider used car warranty.
Still driving my 31 year old Ford Ranger. Zero tech bullshit that fails all the time, easy to fix and repair, no car payment and low insurance.
It just works.
I think it’s cheaper to buy a car and just drive it till the wheels fall off. My last car I had for 20 years! I then bought a new car for the first time ever in my life at age 46. It’s 11 years old now and going strong. I too liked the upgrade to having a back up camera with my 2016 car. But if you drive a car for a long time, try to set aside money every month to go towards your future new or used car. I do like having a paid off car and not having monthly payments as well.
It’s cheaper to buy a Toyota 4runner, keep it for life.
i own a used subaru legacy 2013 and it has a backup camera and bluetooth music
Avoid monthly car payments. Dealerships always buy low from you. Cars are the worst investment. Finding a reliable used car with low mileage is the best option to save money. Toyota is one of the most dependable Japanese brands. With proper maintenance, like regular oil changes, a Toyota can last for years.
It comes down to math of specific cars when comparing Lease vs Buy.
For buying, Cost/month = (Buying Price – Depreciation)/(Months of Ownership).
Depreciation depends on car. In your case, average at 7 years is about 2/3 or -66% depreciation. Luxury tends to depreciate very quickly. And the longer you own, the cheaper it becomes.
So for one of the best selling cars, a new Toyota RAV4 costing $32,000, a 7-year depreciation has historically been at -45% and calculates to $171 monthly cost.
Leasing RAV4 has been $350/month which would need renewals to reach 7 year comparison.
Optimal frugal strategy though most commonly is to buy a few-year old car where most of the depreciation has taken place. And then drive it until “the wheels fall off”.
Occasionally though lease deals are very good if set on a particular car brand/model.
From the responses OP is giving to other comments, it sounds like OP just wants someone else to justify switching cars every 7 years.
To which i say, do what you want with your money. Its yours. You’ve earned it, worked hard for it and it’s completely okay to spend money on whatever makes you happy.
This however, is NOT a Frugal way of life.
Buying a used Toyota corolla that is 10 years or older and will likely outlive you is the way to go!
I myself just recently purchased a 2006 sequoia. Yes it’s a gas guzzler, but It will be reliable and cheap to repair and maintain. Insurance is super cheap, and its the family car so it gets driven for school runs mostly.
Buy a used car direct, not from a dealer. Sell it for scrap when it starts to cost more than it’s worth to repair it.
RESEARCH what is a good car. Don’t buy based on superficial features. Have some base mechanical skills kind of like being able to DIY repairs around your house. A lot of repairs can be done by using Google and a couple YouTube videos.
Buying will always be cheaper in the long run. A lease figures in the depreciation when it’s new and depreciating the most. Buying new vs. used depends on the market. My last two cars, used car prices were crazy high. Buying new made much more sense. My current car is a 2012. I haven’t had a car payment in ten years and will probably get another ten years out of this car.
Get a reliable car, like a Toyota, Honda, or Subaru. It may be a bit more than a Korean car, but more reliable and cheaper in the long run.
Another strategy is to look for an older low-mileage GM or Ford, from an private sale (not from a dealer). You know, the proverbial older car from an old man/lady who “only drove it to church on Sundays.” These depreciate a lot and still have a lot of good miles in them. And, the parts are way cheaper than Japanese parts. The only downside to this is that it may take some time and some looking to find something you like.
Leasing blows my mind – you’re going to pay every month and then NOT own it at the end?
Buy used cars and drive them a long time is the best frugal choice – if you sell, do it private party.
All my vehicles are 24 years old or older. All bought used. Kept oil changed, belts, plugs. Can’t get full coverage insurance due to age but have liability only. Some were only 5 years old when we got them. Mine only have a few sensors on them. My insurance is 80 bucks a month for 4 vehicles.
All have over 228,000 miles.
Depends on EV vs ICE. I made this mistake when I bought my Model S new in 2021; until that point, Tesla Model S actually had really great resale value, but they’ve since become one of the worst for a variety of factors I won’t go into. However, practically, EVs have a problem in that their theoretical range drops over time because of battery degradation (even those ICE cars do too due to engine carbon buildup and mechanical loss from drivetrain wear but they don’t tell you about it like an EV does with a little trip range indicator on the dash) and that means a used or old EV will always have less practicality than a new one. Plus the service costs during the first few years of ownership are very low, but long term they can be quite expensive.
I SHOULD have probably leased my car, since I’m a low milage driver. Instead I financed it at 2.5%, which is quite low, and I made sure that my loan was less than half of the value of the car. I couldn’t have known at the time what kind of company Tesla would become at the time. I do think that in another few years I’ll probably trade it off before I have to do things like battery or suspension replacements; maybe with the discontinuation of the Model S it might help reduce the downward pressure on the prices of them.
Hop on question, what repair cost threshold do you think is appropriate for a used car? Like at what point is it not worth fixing?