Leasing Advantages

Although Dave Ramsey frowns on leasing, other financial experts say there are several advantages to leasing. Provided you don’t drive a metric crap ton of miles, leasing may often be more beneficial. And if you can lease through a business entity, there are also tax advantages! Finally, based on Dave Ramsey’s recommended budget percentages, use your monthly cash flow plan to determine if you’re at or below 10% of your net income.

Leasing benefits include:

1. You’ll have lower payments.
2. You’ll drive “more car” than you could buy.
3. You won’t have surprise repair costs, because the vehicle is under warranty.
4. Routine maintenance is often done at no additional cost.
5. You’ll will be driving something new every 2-3 years.
6. You won’t have to haggle for trade-ins.

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Buying Advantages

There are also many advantages to buying, especially if you tend to drive a more miles. Most financial experts (not just Dave Ramsey) recommend not borrowing money to purchase a car, because of depreciation. However, buying a 2-4 year old vehicle helps overcome this depreciation loss.

Buying benefits include:

1. You won’t have the never-ending payments of re-leasing.
2. You own the car (at least when any loan is paid off).
3. You can drive all the miles you want.
4. No worry about wear-and-tear costs at upon disposition.

I made this list shorter, because I am partial to leasing my daily driver. For older cars — like my 2007 BMW Z4 roadster — I pay cash.

So like I said, in the end it’s knowing your unique situation and what’s in your DNA. If you like leasing, don’t apologize. If you think leasing is stupid, then just buy. Or you can be like me and have a hybrid vehicle acquisition plan.

As Always…

Thanks for reading! I hope this information provides food for thought. Remember that I am not a certified financial planner, a certified public accountant, a licensed real estate agent, etc. My content is for educational purposes. I am a math educator who happens to have a finance degree. Like they say, never take financial advice from a math teacher! (Do they really say that?)

But you should spend less than you earn, invest the difference, and stay out of debt!

I would so appreciate your sharing my content with anyone you feel could benefit. And if you would like a free exploratory conversation or just want to shoot the breeze about personal finances, call me and leave a message or send a text to 570-731-0425.