You know how when you’re a little kid you think that the things that your family does is what all people everywhere do? Like, your family eats dinner at 5 o’clock every day, so all families everywhere must eat dinner at 5 o’clock every day?
Well, when I was a little kid I used to think that it was totally normal to get a new car every year. I thought that everyone’s dad would come home from work with a new car, completely by surprise, every so often. It wasn’t until I was a teenager that I realized that this is not, in fact, what all dads do.
You see, my dad is “into” cars. He loves cars. He likes to read about them, research them, test drive them, work on them. That’s why cars were never a permanent fixture in my family – my dad was always up on the latest and greatest and wanted to try it out for himself.
One of the reasons my dad was able to indulge his passion so frequently was that he didn’t buy all of these cars – he leased a lot of them. He knew himself and he knew that most of these cars wouldn’t last more than a year or so, so he chose leasing over buying on several occasions.
[Free Resource: Check your free credit report and score]
As I got older and started reading up on personal finance, I frequently came across a piece of advice I could never totally buy into: never lease a car. A quick Google search about buying versus leasing will return tons of articles about how leasing vehicles is total money pit. But is that always the case?
In strictly financial terms, yes. The most frugal way to obtain a car is to buy a late-model used vehicle with cash, drive it until its wheels fall off, then do the same thing all over again with your next car. But does that mean that no one should lease a car, ever?
Actually, no. You’re a good candidate for leasing a car if:
- You don’t drive a lot of miles every year
- You don’t want to worry too much about maintenance; leased vehicles are newer, so maintenance costs should be low
- You enjoy driving new cars but can’t afford or don’t want the high payments associated with this
- You’re like my dad and you like to trade in your cars frequently
The upshot to all of this is that when it comes to making the decision of whether to buy or lease a car – just as with all other major financial decisions – there’s a lot more to consider than just the dollars and cents. For a lot of people (like my dad!) the car they drive is a quality of life issue, and shelling out a little more over the course of their lifetimes to be able to drive a lot of different, cool cars is worth it. As long as their lifestyles are scaled back in other areas, it’s not worth quibbling over.
At least, not in my family!