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Should You Buy or Lease a New Car? | Consumer Reports

Should You Buy or Lease a New Car? | Consumer Reports


You’re at the dealership,
have taken a test drive, and are completely in love. But what’s next? To buy or not to buy? That is the question you
may be asking yourself. That’s why Consumer
Reports has identified five different drivers
to help you solve the age old question of buying
versus leasing in this CR faceoff. First up, the Road Warrior. You drive 15,000 miles a year. As a marathon driver, you’ll
want to own your new car rather than lease it. Most car leases range
from 10,000 miles to 15,000 miles a year. If you drive a lease vehicle
over your yearly limit, you may end up with
a hefty surcharge. Buy the car outright, and you’re
free to put as many miles on it as you like. Next, we have the
Freshman, folks who have little credit
history or don’t have any credit at all, have
student loans to pay off, or strapped for cash. If you fit this
bill, then you might want to say yes to the lease. Lower monthly car payments
can make it easier to plan for your
finances, and leasing can jump start your
credit, giving you more options for your next car. Be sure to look beyond
the advertised payments to understand all the costs
associated with the lease. And don’t be shy
about negotiating as you would with a purchase. Number three, the Early Adopter. One of the biggest perks
of leasing a new vehicle is that you get to experience
a new car every two to three years. That’s why leasing
is best for those who want to stay on top of
the latest in safety, driving, and infotainment systems. This is especially
true if you want to experience new electric
car technologies, where you’re likely to see big improvements
in how far the car will drive on a single charge. Then, you have the Penny Saver. If you’re looking for the
cheapest monthly payments right now, leasing
is the way to go. Lease payments are
lower because you’re paying only for the vehicle’s
depreciation during a lease term, plus interest
charges, taxes, and fees. And number five, the Practical. We all know that
person who brags about having over 200,000
miles on their baby. These folks value getting
the most life and money out of their car. If you find yourself
here, you’ll definitely want to buy a car,
because you own the vehicle, and you get to keep it
as long as you want. By owning, you won’t
have to worry about wear and tear until
it’s time to sell. Then, of course, it could
impact the vehicle’s trade in or resale value. Consumers should be aware of the
popular trend called long term financing. When car buyers take out 72
to 84 month loans in order to get lower monthly payments,
like those in a lease. If you go this
route, keep in mind that many lenders typically
charge higher interest rates on long term car loans, which
means you could find yourself in an upside down
situation, owing more than what the vehicle is worth
for a longer period of time. Bottom line, buying
typically involves higher monthly payments. But it can save you more
money in the long run. Leasing has definite
appeal, and it can be the right
choice for many, but be aware that it
can get you into a cycle where you never stop
paying for a vehicle. For more on new car financing
and reliability ratings, check out cr.org.

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85 thoughts on “Should You Buy or Lease a New Car? | Consumer Reports

  1. If you want low payments, buy a used car. That's a much better option than leasing (renting) a car. Nowadays, most lease deals start at 7000 miles a year for the base model vehicles! By the time you option it out and pay for extra miles, the monthly payments between buying and leasing a new car are nearly identical.

  2. Great video! I'll definitely have to take the information discussed in this video into account when I go to get my first car. Thanks, CR! 👍🏽

  3. Please, do not lease. Buy and sell a car every 2-3 years if you always want whats new. You can use the trade in value of your old car towards the new one. With a lease you pay hundreds of $ per month, and get nothing back when the lease is over.

  4. Consumer Reports is broken and can't be fixed.  The best option is to buy a used car a few years old, buy from a single owner, pay 100 bucks to have the car hooked up to a computer and thoroughly checked out,  then take out a loan from your credit union.  However, Saving ahead and paying cash is best.  Leasing a car is the most expensive way to buy a car!  Buying a brand new car is a good way to pay that 20 percent initial depreciation cost.  No thank you.

  5. Avoid using credit like a plague. If you must use credit get the lowest rate and lowest duration possible. Once paid off you can take your insurance down to liability only and start saving to buy your next car with cash.

  6. If you have to finance a car for 6+ years, you cannot afford it. This video forgot one important aspect and that is to live within your means.

  7. I have leased my last two cars & it has worked out pretty well for me. I usually put about $2k down & get a three year term with 12k miles. This way the car is always under warranty. My job is fairly secure & it's nice to know exactly how much my monthly auto expenses will be, without worrying about large repair bills. The newer technology in cars today is very worthwhile. Also, with used you never really know how well the car was taken care of. Not to mention having to make sure it wasn't in a recent flood! The keys to good leasing are to always keep an eye on your total miles (my dealer offered me lease prices for 15k & 18K, also) & taking proper care of the car.

  8. If someone is struggling with money then they shouldn’t be making a commitment to make payments on a car. just buy off craigslist and wait until you can buy it (finance)..if you sell your cars often then yes lease it. in the end you get nothing. just buy a cheap car and use it until the wheels fall off then get a car to finance.

  9. There is a reason why Japanese car market thrives on North Americans. All ppl do is lease because they have no actual money. I never lease, borrowed or finanace a new car. Always bought brand new and its the best money saver.

  10. Really horrible advice, probably this video was promoted by the auto industry. No brainer why 6 out of 10 Americans are in debt. Buying 3 year old car with high reliability score and driving it to its death is the most practical and smart way to iwn a car

  11. Or Just buy a reliable car. I’m so sick of people buying Dodge vehicles. Stop buying cars that tells you what to do when you see it

  12. It used to be the case where buying a car maybe slightly used and racking up the miles and years on it was the cheapest way to own a car. Maybe for some kinds of cars that have proven long-term reliability that's still the case, but for many higher end models owning them out of warranty can be potentially ruinous financially, as all of the 'latest tech' isn't equally reliable over the years or easy to fix, and it's rare these days for a backyard mechanic to be able to handle troubleshooting/fixing anything but the simplest of problems. If you're in that 'Practical' category, choose wisely. Generally – in my view for almost any car you should strive to pay cash for it, and if you can't afford to do that, you can't afford the car.

  13. There are two kinds of people, The people who pay interest and there are the people who make interest
    Don't be a sucker buy a used car with cash don't have payments and invest your monthly payment to do things you like instead of being a slave

  14. There should be no reason to lease a car.  It is the most expensive way to operate a motor vehicle.  I am disappointed in consumer reports on this video.  Leasing is a no win situation for the consumer and the dealer makes so much money.  Shame on you consumer reports for saying leasing is a way to go.

  15. I always tried to lease but I end up buying. Too many rules and concerns with leasing plus you need to adjust your insurance coverage to the dealer’s preference. By buying and financing the car is yours unless you default on the payments. I always try to save as much or close to how much the car is worth new so I could have peace of mind when owning the car. This way, in case other expenses pop up I can have some cushion and not be “car poor”

  16. A lightly used car (~10k to ~30k on odo) makes more financial sense. The owner likely hasn't went crazy on the car yet & the price already took a ~30% cut thanks to depreciation. Best of all the warranty is still there, which is safer than a ~$1000 clunker that would likely require ~$10k in repairs over the next year of ownership. Plus you still get a nicer/safer car & peace of mind.

  17. How totally irresponsible for CR to even suggest leasing makes sense for anyone! You're so experienced on evaluating products for people, but totally ignore the stupidity of leases for any consumer.

  18. Leasing in theory is just paying only for the first 3 years of depreciation. However most dealers overcharge leasees if you get 20k depreciation in 2 years (bmw), then you'd better off buy a 20k car. However buying that BMW you'll end up with 800+/mo in payments

  19. I'd rather purchase another import car and pay for it in 5 or 6 years. After that term, I will have the chance to save for another year for a down payment for my next car, then I can sell or trade-in the old car.

  20. – Know how many miles you drive per year. You can lease beyond 15K per year. It IS cheaper to add those miles ahead of time.
    – Know your credit scores. Fix your credit issues.
    – Get on Yelp!, find Broker(s).
    – Test drive, decide what you want.
    – Get a VIN for a similar vehicle (trim & paint color), check the insurance rates.
    – Get on Edmunds, find out the invoice price, trim, options, paint color, destination.
    – Check the manufactures website for any rebates / incentives.
    – Shop those Brokers, you want the Cap Cost (the price of the vehicle before destination & taxes & fees) as close or below invoice.
    – Only put down all fees & the 1st months payment. Lease for 36 months.
    – Add GAP Insurance through your auto insurer to your lease.
    – Lease again during month 35.
    – Sell the previous lease to a dealer. (you avoid the 3rd party inspection & sales tax is not involved when selling to a dealer)

  21. It's very difficult for a newbie with relatively new to no credit to be able lease a vehicle, so that's a very poor recommendation.

  22. Do yourself a favor and never ever ever flease…worst case scenario finance. Pay off stupid credit card debt and save cash for your car. This is a depreciating liability and the only ones winning when you lease is a dealer, usually off the backs of the poor (the penny saver) students (the freshman), and emotional impulse buyers (the early adopter).

  23. Also, leasing can get out of the fear of "owing " the first year model car. If the first model year turned out to be disastrous, you just return it after 36 month (bumper to bumper warranty). So you don't become stuck with a lemon car.

  24. Excellent advice! I'm retired and do put lots of miles on my vehicel, so leasing has been my preferred method in recent years.

  25. I live in LALA land and have had 3 cars totaled in 11 years =( …(no one got hurt) I cannot even imagine "buying"… leasing is the way to plus go plus it is way way more convenient and cheaper… since I spend 15 hours a week on the road I love my local dealership and all my maintenance is included.

  26. What should also be taken into consideration is the insurance cost. The newer the car is the more expensive it will be. And this can easily make a car not so affordable.

  27. There is literally no excuse to lease unless you are rich or it can be used as a business expense write off… At the end of a 3 year lease, you'd be looking at 10-15,000 minumum loss if turned back in.

  28. I have a better option.

    Ally bank offers leases for used vehicles.

    Why not get into that financing and buy a CPO car + Ally Smart Lease (aka used vehicle leasing).

    That will save u money for sure !! and no need to waste money on a NEW car

  29. Leasing is definitely the way to go. You don't have to do any maintenance besides oil changes and fluids, get that new car smell every few years, the newest safety features, and you don't care about reliability. For the typical lease, you are always in warranty and don't have to worry about expensive repairs like a transmission replacement. The best reason to lease? It can be super cheap. Try buying a Chevy Cruze for less than $100 a month just signing and driving. With leasing, it can happen

  30. Why wasn't there any talk about the advantages of paying cash? CR implies that the only way to operate a car is to finance it or to lease it. Both methods are counterproductive towards building wealth. Fail.

  31. Do the math, lease is great, but not for everyone. I just today leased a 2017 Honda Civic LX for $2000 down & $170 per month X 35 months @ 12,000 miles per year. Completely under warranty. Very Happy !

  32. What about a guy that puts 5000 mi yrly on a car and finds enjoyment & safety in a new car that he's always wanted? How does a warrenty work with leased vehicles?

  33. The best option: buy a used lease from someone. I did a research on around 20 different models. It came out cheaper by 5-10% over buying used (same mileage) with cash. And the best part…..you get to pay that with payments, which will be much more convenient. Just go to leasebusters (or any other "lease takeover" site) and see for yourselves.

  34. Great video, thanks CR!

    A lot of people think the best option is to buy a used car but in my experience, the best option is to buy new and keep it for a long time.
    Financing makes sense even if you have the cash as interest rates are ridiculously low but always choose the shortest repayment period (36 months).

  35. I've tried it both ways, and leasing makes me a lot happier. If you can afford it, leasing new every 3 years is great.

  36. Leasing is the best for me cause i only drive about 10,000 a year and I love the fact that I get a new car ever 3 years. Best thing is the car was under warranty during the entire lease. Also never have to buy tires. But getting cap insurance is a must.

  37. Terrible advice. There's no way most college freshman can afford a lease. It's cheaper to buy an older used car, assuming you don't buy a lemon!

  38. There are 3 logical solutions to leasing:

    1. Be smart and buy a new car you can afford, if you only have $20,000 then buy a car for $20,000

    2. Buy used if you want to save money and look good (a used 2011 5-Series can cost $20,000)

    3. Buy a used 1997-2001 Toyota Camry if you don't care about the latest and greatest and want a car that will give you no issues

    And telling a student to lease a car is pure stupidity, teenagers drive a lot, so you'd rack up miles and most students don't have $20,000 laying around to just buy the car after having put too many miles on the car.

  39. If you can't pay cash for a vehicle, you simply cannot afford it, period. 84 month loans now? No wonder America is in so much consumer debt… it's idiotic. Poor people ask how much down and how much a month. Financially stable people (smart with money) just ask how much. Screw payments.

  40. Leasing forever means I never have to pay for expensive repairs like transmissions, engines, timing belt, AC compressor, and so on. Of course, I also lease because I drive 5 miles a day to and from work and my current 3 year old car is only 10K miles on the Odometer. Leasing Agents love me!

  41. NEVER ever Lease…. Like Dave Ramsey says Flease… Don't be stupid. Car companies don't "Rent" cars to loose money. Just use your brain. Lower monthly car payments? Are you kidding? CR is working with manufacturers. THEY Lease.

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