Overhaulin'

How do I calculate my savings on leasing a new vs a used car? Is there a formula?

We cant agree on whether there is a savings! If we lease a new car we pay a premium though we get a warranty. If we lease a used car I assume we don't pay new car prices though we are charged more interest and must buy a warranty? We need to hear from you as to what to do!

Public Comments

1. First, the bad news: Unless you can deduct your lease expenses as a business expense, leasing is ALWAYS the most expensive way to get a car -- always. You are really only renting it. It seems cheap but it gives you no asset value. The better idea is to find a nice certified pre-owned car and buy it (cash or finance). That way you take advantage of the depreciation, but you don't suffer for it as you would on a lease, and you'll get a warranty that is as good or better than new. Leasing makes you feel like you can afford something that you really can't but it is not a financially sound way to obtain a car. Good Luck. Buy Honda : -)
2. A lot of it depends on how you classify savings. A monthly lease payment is usually cheaper. This saves money on a monthly basis but a conventional purchase is usually less expensive in the long run. If you are going to lease do so ONLY on a new car. Leasing used is about the worst thing you can do. If you lease I recommend a manufacturer incentivized lease (high residual, low money factor) these can actually be a very smart decision if the terms are right, you take care of your cars and stay within the miles. Although, buying a 1-2 year old car is usually best considering the massive depreciation seen on new cars these days. You can usually get a very good extended warranty ( bmw and lexus both have excellent CPO programs ) and the car will have a lot of life left. If you email me some info on your specific situation I can help further. andrewmiller1998@yahoo.com PS- Contrary to popular belief leasing is not always the most expensive way to purchase a vehicle and you should never buy a used Honda as the difference in price between new and used is to small to justify it.