<p>I have never researched leasing a car as I’ve heard it’s not a good financial decision. But I just got a new job which will involve a lot of driving and I will get a car allowance. Does it make any sense to lease in this case? I will likely put a lot of miles on it, so can I add extra miles into a lease? I ask b/c I’ve heard that leases will restrict the amount of miles you put on…or else you get a big penalty. </p>
<p>I just hate the thought of getting a new car for this job and then putting a zillion miles on it in the first year. :o</p>
<p>You need to tell us how your car allowance works to make that determination but generally if you are driving a lot of miles a lease gets very expensive.</p>
<p>We are in a similar situation. My H drives a LOT for business and is putting 35-40K miles per year on a car. He gets a very nice car allowance which shows up in the paycheck and then needs to deduct car expenses on our tax returns.</p>
<p>Our solution is to buy “gently used” off lease vehicles with 20-30K miles on them, buy the extended warranty if available, and drive them forever. Forever in this case being to 150-200K miles … or 3-6 years … whichever comes first. </p>
<p>His current vehicle is an Infiniti G35, previous vehicle was an Infiniti i20. The i20 was a steal – unfortunately the <em>dealer</em> managed to total it on the lot last fall while it was in for a minor repair.</p>
<p>We have never been able to make a lease worthwhile because of the high mileage we put on our cars. I am nearly an hour from work and my wife is about 45 minutes from her job plus we do several trips per year to daughter’s school (8 hours each way) and tend to drive on vacations. We have three car-buying strategies that have worked well over the years. Perhaps one will appeal to you:</p>
<p>1) Buy a new car that has had a good record for longevity but has not had a major redesign in the last model year or two. Plan to keep it for 150K to 200K miles.</p>
<p>2) Buy a fairly recent used car, perhaps one coming off a lease without too many miles on it. That way someone else takes the initial depreciation hit and the car is still fairly new.</p>
<p>3) If you don’t mind old but cheap, look for something with about 80-90K miles on it that is up-to-date on maintenance (meaning that all the expensive stuff that typically goes between 60K and 80K has been replaced and you should be able to put in another 40K-50K miles with routine maintenance.)</p>
<p>With 2 or 3, you will want to have a GOOD independent mechanic look over the car before you close the deal. It is well worth paying for an hour or so of their time to avoid buying something with an expensive problem.</p>
<p>tom1944 the allowance is paid as a lump sum every month. ie: I’d get X hundred every month. Why does that matter? Does it make a difference for tax purposes?</p>
<p>Speaking of leases, I have a friend who is recently divorced and struggling a bit to get by financially. She is thinking about getting a lease because she’s worried about paying for car repairs on her aging car. She doesn’t drive a lot of miles. I’ve only heard bad stuff about leases, but do you think it could be a good decision for someone like her?</p>
<p>Depends. What shape is the old car in? How many miles? Does she have reason to expect some major bills soon? What is the resale or trade-in value?</p>
<p>In some circumstances, it might make sense to put the amount she would have spent on a lease into a bank account. Use that account to pay for repairs. If she winds up ahead, so much the better. If the repairs start getting more expensive, then she can dump the old car and redirect the payments to a lease.</p>
<p>In others, she might do better with an immediate lease. For example, if the old car has good resale value now but she has some reason to think that may soon change, if she just does not have the ability to put the money in the bank and leave it there against the need for repairs, or if she just needs the peace of mind that a newer and more reliable car would bring.</p>
<p>Sometimes very good lease deals come up with cars that the manufacturer thinks might sell better in two years than now, such as luxury cars during a recession or SUVs during a perceived gas cost crisis. Then it can make sense to lease IF you’re not doing zillions of miles. Or even if you are… we had a lease once that cost ten cents a mile over the 15K they allowed. </p>
<p>Be cynical about a lease. Look seriously at what happens at the end of the lease. Is the buyout price low or high compared to what used cars of the same make are selling for right now? You want a walk-away lease, where there are no ambiguous costs at the end.</p>
<p>dmd, we lease, and we prebuy our miles (and this goes into the monthly payments) b/c H drives many miles over the 12-15,000/year limit. This is one reason that we lease. At the end of 3 years, H’s car has 90k+ on it. We never pay more than .10/mile over the limit, and if we do not use all of our miles, we ask if they will refund our money (some dealers do, but not all, which would be a dealbreaker).</p>
:eek:
I hope they gave you an incredible deal on that new car. That is an interesting new way to make a new car sale! ;)</p>
<p>As for leases, I am one of those “own it til it drops” car buyers. I dislike everything I’ve heard about leasing. I’ve also lisliked leased office equipment- they always stick in hidden charges. Grrr. With my car, I also get to take all my car expenses off my business, so it works out better that way for me, IMO.</p>
<p>In our case, H is an attorney, so I feel comfortable with him reading the fine print, negotiating, and with dealing with any backend charges.</p>
<p>He went to bat for a neighbor who was being charged $700 at the end of a lease for some scratches/normal wear and tear. They were so upset, but H helped to get them out of it. They were so grateful, and they sent us a lovely gift certificate for dinner.</p>
<p>Ahhh, NEM, an attorney. So, if he is an an accident, he and the other person involved can go after the leasing company, as the owner of the car. Very clever… ;)</p>
<p>Well, that never happened. We did get some paperwork on one of leases that had a big blooper on it. We did not take advantage of the situation, but it had the end of lease buy out at a crazy price, something like $15! That was interesting.</p>