Leasing vs. Buying: The Car Debate Continues
“Honest disagreement is often a good sign of progress.” — Mahatma Gandhi
Over the past few weeks, the alarm on my Volvo sounded three times without any apparent reason. I was convinced that we were having mild tremors (of the earthquake variety) and the vibration was activating my car alarm.
The third time it did this; Jeanine came running to find me with a big smirk on her face and sarcastically asked if I felt the earthquake. Okay, okay, so tremors are not the culprit… my alarm system keeps short circuiting. The result: a $435 repair bill.
This Lease vs. Own topic continues to be of much debate in our relationship and I’ve mentioned it on many occasions of which you can find the most recent here. On most other financial matters, Jeanine and I see eye-to-eye but this is one expense where we hover at opposite ends of the spectrum. I don’t anticipate coming to a compromise anytime soon.
Jeanine leases a new Saab every three years and I buy a used car (usually three years old) and try to keep it for five. When a car is more than five years old and the miles start creeping towards 100,000 there will be problems. But that’s the trade-off. I don’t have a car payment, but I have the occasional $435 repair bill. Jeanine has a $350 per month lease payment… forever.
Suze Orman is on my side with this debate. She suggests, “Buy what I call a new used car – a vehicle that is one or two years old, but has been well-maintained and doesn’t have a ton of miles. It’s just like new, except that its price is more like a used car. Once you own that car, own it for as long as you can. There are so many advantages to owning a car for a long time. Your insurance will be lower, DMV fees may be less, and it is easier to forego the expense and bother of cosmetic repairs for every little scratch or ding.”
“Speaking of repairs, I imagine some of you right now are about to launch the ‘repairs on old cars are too costly’ argument. Come on. Even if you sink $1,000 a year into your ‘old’ car for repairs and maintenance, that’s still better than the $4,000 or $5,000 a year you would shell out for leasing a new car.” Jeanine, listen up (as Suze would say)!
She continues on and writes, “Whenever I am asked what is the most stupid financial move I ever made in my entire life, I don’t have to think very long. It was when I leased my 1987 730i BMW. I leased because I wanted to impress my love interest at the time with this fancy-schmancy car that I couldn’t afford to buy. And the fact that I couldn’t afford it was about the last thing I wanted anyone, let alone my partner, to know.” Side note: Suze practically came out in that paragraph. Go Suze!
But Jeanine is not budging on this issue. She believes we should drive new cars because we’re women… meaning, there are safety concerns with cars breaking down. But isn’t that the purpose of roadside assistance? I’m not going to win. This is why her car is in her name and my car is in my name and we each drive our merry way when it comes to this debate.
We agree to disagree. In the interest of full disclosure: We do however; take her car on all road trips… but I consider it a perk (safety and otherwise) of being with a partner that leases a new car.