Buy or Lease? Here’s How to Decide.

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Seldom a day goes by that I don’t get the question, should I buy or should I lease?

The question has a lot of validity especially in December when the lease deals always get better, and are in fact, the best of the year for many manufacturers, especially the luxury brands.

I often say on the air that leasing is not for everybody.

When I get the question of lease versus buy, my first question back is always how many miles per year do you drive? Some people, especially third-party leasing companies, will disagree with me on this, however, I maintain that if you drive more than 17,500 miles per year, you have no business leasing. There are some true advantages to leasing, but this is only a benefit to you if you are not a high-mileage driver.

The reason for leasing in my view is that if you stay within the allotted mileage, you cannot owe more on your car than its value at the end of the lease. The advantage here is that you can simply walk away and not owe any more. If you have equity, you get to keep that for your next lease or purchase.

In my opinion, the perfect lease is three years.

The reason for this is that you are highly unlikely to need to buy tires. Plus, you won’t be out a ton of money on maintenance costs like timing belts, and other mechanical issues that occur further down the road as a car ages. Additionally, you will always have the latest technology options and safety features on your car.

If you are going to get on a cycle of back-to-back leases, it is critically important that you have the mindset that you will never own a car outright. When you are leasing, you are paying a lower than usual monthly payment, and often this lower payment allows you to buy a higher- end model. These are all issues to consider when pondering whether to lease or buy.

If you are a person who likes to be without a car payment and drive a car until the wheels fall off, then, bottom line, leasing is not for you. I would never go into a lease planning to buy the car at the end of the lease. This defeats the attributes of leasing in the first place.

I also recommend that you lease directly from a dealership instead of a third party lease company.

The reason for this is, the third party lease companies purchase from local dealerships, mark them up, and then generally stretch a lease out to four, five, or six years. That is just too long to lease in most the majority of cases. Why would you add that extra profit margin to pay a third party lease company when it is not necessary?

It is also important to understand that there are low lease interest factors offered from the factory to help keep your payments low. This is very prevalent with the imports and luxury brands, especially in December. A third party lease company does not have access to those rates, therefore, making the case again that it is better to lease directly from the dealership.

I hear from consumers on a regular basis who have been burned by leasing many years ago. Today, the reason the manufacturers love leasing is because it puts you back into the market sooner. This should result in the manufacturer selling more cars. For this reason, some manufacturers make leasing such an attractive proposition that it is hard to resist.

Leasing has made quite a comeback in 2011, and without a doubt, there will be a lot of lease activity this month with the specials that are out there. Most automakers have gotten aggressive in leasing again, and we are seeing the domestics re-entering the leasing game. I can’t think of a single brand that isn’t offering some sort of lease specials currently.

If leasing is right for you, and you are absolutely sure of the mileage you drive annually, then leasing is a great way to get a car. After all, you are only paying for the best years of the car’s life, the first few years.

Photo Credit: Shutterstock
  1. Jack Crump 3 years ago

    I am considering leasing because for once in my life I want to drive a top of the line plush car with all the bells and whistles. My question, how does the dealer usually handle a lemon? I would be very unhappy in a 3 year lease spending more time in repair then driving.


    • Jerry 3 years ago

      Jack, good to hear from you. I am not sure where you are located, and every State’s Lemon Law rules are different. If you get a luxury car, odds are slim you’ll have any serious issues. I wouldn’t worry about that at this point.

      Let me know how I can help, i have good dealers all over the country.

      Jerry Reynolds, President
      Car Pro Radio Network

  2. Fred Abney 3 years ago

    Bought the RX330 I was leasing…..but paid nothing down when I leased it.
    (Sewell Lexus in Dallas in 2005)
    Now have 177k miles on it-and still nothing seems wrong with it!!! Bravo
    Lexus. Question: Where can I find a Lexus dealer that wants to lease a
    RX350 without making me pay down about 10% of the car’s value???

    • Jerry 3 years ago

      Fred, talk to my friend Chris Brunner the GM at Park Place Lexus, he’s been taking care of my listeners for years 972-407-7000. Just tell him I sent you! THANKS for listening to the show!

      Jerry Reynolds, President
      Car Pro Radio Network

  3. Billy 3 years ago

    Hey Jerry,
    My wife and I are in our mid 50s. Kids grown,home been paid off awhile now. Living life debt free. We been buying new cars and paying cash for them and keeping them a long time. The two we have are 03 models. My pick up has 200k miles while her car has only 70k. We decided to lease a new Camay for her.We have had it a year now,great car. In doing research after the fact we found you.
    My concern is on the gap insurance the dealer charges me 20 or 30 bucks a month for when I could get it with Allstate for 30 bucks for 6months. Dealer says theirs is different if you wreck the car it pays off the note and gets you a new car. not leaving you driving a repaired car and being up side down. Was thinking about dropping the dealer gap next time and using the difference to upgrade to the xle. And getting the gap with my insurance co. Your thoughts please.

    • Jerry 3 years ago

      Billy, good to hear from you. To my knowledge, all gap insurance works the same. I have written on the subject:

      You can cancel the GAP and get the unused portion back. It will go to the lender, but make the payoff lower for the next lease. The August Toyota lease incentives are the best I’ve ever seen. If you’ll let me know where you are located, I’ll recommend a Toyota dealer for you, we have great ones in almost every market the show airs in.

      THANKS for listening!

      Jerry Reynolds, President
      Car Pro Radio Network

  4. Fred 3 years ago

    I do not like to make car payments, but like the idea of getting a new car every three years. I drive 8 or 9 thousand miles a year.
    Is a single payment lease a good idea?
    Thanks, love your radio show

    • Michele Sanders 3 years ago

      Fred, good to hear from you. That exactly what I did when I got my Corvette a year ago, you save a little money AND a lot of hassle. If you have the cash, it’s a good way to go for sure.

      Let me know if you need a dealer referral! Thanks for listening to the show.

      Jerry Reynolds, President
      Car Pro Radio Network

  5. Vince 3 years ago

    Hey Jerry,
    Do you have any recommendations for the nissan dealership in Sacramento area, looking to lease murano for 3 years.

  6. Hank Olszowy 3 years ago

    I retired three years ago and have noticed that I’m only putting about 6,000 miles a year on my car now that the daily commute is history.

    I’m in the market for a new one and would like your recommendation whether leasing with such low mileage is better than purchasing.

    I’m familiar with leasing having been self-employed but there’s no tax advantage anymore as the business is also history. Thanks.

    • Michele Sanders 2 years ago

      Hank, good to hear from you. I think you are a perfect lease candidate and that you’ll have good equity and the end for the next deal.

      Use my dealers from the CERTIFIED DEALER section of this website, they’ll save you money! THANKS for listening to the show!

      Jerry Reynolds, President
      Car Pro Radio Network

  7. paul 2 years ago

    what happens when you have to give up a car before the three year lease is up

    • Michele Sanders 2 years ago

      Not sure what you mean by “give up”. Usually you can trade a lease in about two-thirds of the way into it. I need more information, I’ll do my best to assist.

      Jerry Reynolds, President
      Car Pro Radio Network

  8. Nate S. 2 years ago

    I have a 2003 EX-L Honda Accord sedan with 203,000 miles on it. I don’t drive anymore than 15,000 miles a year. I have been in the market for a vehicle at a low monthly cost preferably under $225 a month. I think a 3 year would be perfect. I am a big fan of just a nice sedan. What is your suggestion of the best vehicle that fits this description?

    Also I need to put zero down as I don’t have any funds available. Do you think it would be best to privately sell my vehicle or trade it in?

    I have been eyeing the Mazda 6 but not sure if something like a Camry or Accord would be a better option. I live in Phoenix, AZ.

    Thank you in advance for your assistance.

    • Michele Sanders 2 years ago

      Good to hear from you. Right now, Camry has the best lease deals, and your Honda will bring enough to get you a super low payment. Talk to my friend Jason at Right Toyota, he’ll take super care of you, click here:

      Thanks for listening to the show!

      Jerry Reynolds, President
      Car Pro Radio Network

  9. Keith Patton 2 years ago

    I have leased a 2013 Edge from Five Star Ford. I plan to lease another one from them soon, but need to know how I can ensure they recognize the real value of the car, which will be more than the locked-in return value. I have significantly less miles that expected, and the car is clean.

    Many thanks.

    • Michele Sanders 2 years ago

      Keith, click on this page:

      Under leasing, look at the article, What To DO At The End of Your lease. I think that will answer your questions. You can contact Five Star from the website, under CERTIFIED DEALERS.

      GOOD LUCK!

      Jerry Reynolds, President
      Car Pro Radio Network

  10. Glen Salie 2 years ago

    I am leasing a 2012 Tundra and the lease is up in about 13 months. My question is, can I take it and trade or in at a different brand dealer? I wantt to tow a fifth wheel and was told my 4 door Tundra doesn’t lend itself to this for clearance reasons. So I was thinking of a Dodge, Ford, or Chevy. Also does towing have any effect on leasing a vehicle?

    • Michele Sanders 2 years ago

      Good to hear from you. Yes, you can trade your Tundra anywhere, not a problem and towing is not an issue as long as no damage results from the towing.

      Not sure where you are, but I have good dealers for all those trucks on this website under CERTIFIED DEALERS.

      THANKS for listening!

      Jerry Reynolds, President
      Car Pro Radio Network

  11. John L. Moody 2 years ago

    I am 76 years old and would like to think about leasing for the next three years. I am not going to trade my 2009 F-150. I do have a 1995 Ranger XLT supercab with no dents and good paint that I bought new from Murray Motors in Wills Point Texas and was wondering who I could get the best deal and service in the area where I live. I live in Point Texas.

    I want a super quiet vehicle because our east texas roads are very noisy by design. Which would be the quietest between the ford and the nissan. We do not have many choices due to living a great distance from an authorized dealer.

    Your Reply would be appreciated and thanks for reading this.


    • Michele Sanders 2 years ago

      John, Ford does an exceptional job on sound, they work really hard on that. Talk to Donnie at 5 Star Ford in Plano, he’ll take good care of you. 972 985-3600 is the number. Sounds like leasing would work well for you!

      THANKS for listening to the show!

      Jerry Reynolds, President
      Car Pro Radio Network

  12. Charles Horn 2 years ago

    Hi Jerry,

    I have read your articles on leasing and I feel that I would be a good canidate for leasing. I’m thinking about the Mercedes Benz GLA 250 4D Sport Utility.
    Do you have a recommended dealer inn the San Antonio, Texas area?

    Thank you. I enjoy your show.


    • Michele Sanders 2 years ago

      Charles, good to hear from you. I don’t have an MB dealer there, I have great ones in Houston and Dallas if you don’t have any luck locally.

      Really appreciate you listening to the show!

      Jerry Reynolds, President
      Car Pro Radio Network

  13. Kris 2 years ago

    Hello! I have two car needs and would like your help, please:
    Husband is about to work 500 miles away and drive home and back twice a month. Need a car to handle the miles, low price, and thinking about something several years old in order to be affordable, but new enough to have good technology inside and a comfy, quiet ride with good gas mileage. Looking at a 2013 Kia Optima EX w/ 50k miles on it. It’s price is 14,600 but was hoping for 13,000. Reasonable expectation? Is 50k miles just too dicey?
    Q2: daughter is a freshman college student 3 hrs away. We’ve never leased but want her in something safe so thinking perhaps a lease would be smart and that new might be the way to go however buying a college student a brand new car on one hand feels crazy! Read on your website that half of all fatalities for teens were in cars more than 11 yrs old. That statistic was from 2004 and not sure what it is today, but it got us to consider a new car. Looking to keep costs low as possible, but not scrimp on safety or mpg. Do you recommend any car in particular to lease for this situation? Thank you! Denton, TX May 2016

    • Michele Sanders 2 years ago

      Good to hear from you. For Hubby, Optima is a good choice, as is Hyundai Sonata, Ford Fusion, and Toyota Camry. I tend to lean to the Camry, it just has a terrific history.

      For your daughter, sounds like a lease would work great. I’d suggest the best lease deals are the Corolla, at least through Memorial Day. Talk to BJ at Freeman Toyota 817 287-5285. He can assist with both! THANKS for listening to the show.

      Jerry Reynolds, President
      Car Pro Radio Network

  14. ben 1 year ago

    Please can you advise me on a lease. I already have gone 10000 miles over on my first year lease on jaguar 2015 xjl .So How shall prepare my self when i return the car in 24 months.

    • Michele Sanders 1 year ago

      I would start putting money away every month (where you won’t touch it) to cover the overage. Your other option is to plan to purchase it at the end of the lease, then the mileage doesn’t matter. Thanks for listening, I hope this helps!

      Jerry Reynolds, President
      Car Pro Radio Network

  15. Geoff 1 year ago

    we have a lease now, when its up we want to get a different car.
    what happens? we got the first with no money down

    • Michele Sanders 1 year ago

      Go to my FAQ page at this website, under leasing you’ll find good info on what to do at the end of a lease that will help you a lot. Thanks for listening!

      Jerry Reynolds, President
      Car Pro Radio Network

  16. mo 12 months ago

    my lease is ending up and I just want to get a newer model of the same car. will they do the credit check again or they will keep me with the same bank? right now I am currently financing with toyota financial and I never missed any payment.

    • Amy Plemons 12 months ago

      You will need a new credit application for sure, they’ll want to look at overall credit, and the debt to income relationship. It is just a formality, but they will want a new application on file. I appreciate you listening to the show.

      Jerry Reynolds, President
      Car Pro Radio Network

  17. Jen Howard 11 months ago

    Help- I have a 2013 Hyundai Santa Fe Turbo Sport on lease up in May thank goodness – not happy with the car at all- plus need one now with more space had another child last year and need a SUV/van that seats 5 to 7 now comfortably as we have one convertible carseat and a booster seat. what is the best thing to do with this lease – Hyundai does not make a SUV/Van that i would want and not interested in this car at ALL. Also you say a good dealership to see the cash value (how do you find one) i live in Tampa, FL and do not trust any dealers (have had several bad experiences.

    • Amy Plemons 11 months ago

      Run the Hyundai by a CarMax and see what their free cash offer would be and compare that to the CURRENT balance owed. That will tell you whether to trade now or ride out the lease and take the walk away option. Under FAQ at my website, look under the LEASING section for an article on what to do at the end of a lease. I think that will help you. – Jerry Reynolds

  18. Hyundai Sai Gon Car 10 months ago

    I was wondering if you ever thought of changing the structure of
    your blog? Its very well written; I love what youve
    got to say. But maybe you could a little more in the way of content so people could connect with it better.
    Youve got an awful lot of text for only having
    1 or two pictures. Maybe you could space it out better?

    • Amy Plemons 10 months ago

      Thanks for the feedback! We do feature a lot of photos throughout our posts.

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