I am generally a proponent of buying a good used car. I grew up in the wholesale automobile business, my grandfather, father and after selling our restaurants my husband were all in the business. Personally, I love haggling, and getting a “deal.” However, I read this interesting e-mail today from Lease Trader that compares the cost of leasing vs. buying used of quite a few of the more popular cars .
The experts at car leasing website LeaseTrader.com compare the overall price of popular used cars with the same vehicles listed as a lease takeover, and what they found was that while people think that they’re getting a great deal when buying a used car because they’re investing in a car without the first 12-24 months’ depreciation. But in order to equal the same monthly value in taking over a lease, a person would have to drive their used car for 93 months in some instances.
“A person rarely comes out ahead when buying a used car when you factor in age, interest payments and any extra maintenance needed,” said Sergio Stiberman, CEO and founder of LeaseTrader.com. “Even then, you won’t really take advantage of any ‘equity’ because at that point the car will be virtually worthless.”
While I advocate paying cash and not financing a car, I understand that many of my readers can not do this. LeaseTrader.com analyzed the price and length of use for the following vehicles (including 6% interest on 48-month loans):
2009 Toyota Camry LE
- Suggested used-vehicle price: $18,639
- Same car listed on LeaseTrader.com for $199 p/m with 17 months remaining ($3,383)
- In order to equal same value, must drive used vehicle for 93 months which by then is ten years old
2009 Mercedes GL 450
- Suggested used-vehicle price: $60,084
- Same car listed on LeaseTrader.com for $825 p/m with 11 months remaining ($9,075)
- Must drive used vehicle for 73 months which by then is seven years old
2008 Honda Civic Hybrid Sedan
- Suggested used-vehicle price: $22,427
- Same car listed on LeaseTrader.com for $407 p/m with seven months remaining ($2,849)
- Must drive used vehicle for 55 months which by then is 6.5 years old
2008 Nissan Altima 2.5 S Sedan
- Suggested used-vehicle price: $17,884
- Same car listed on LeaseTrader.com for $218 p/m with eight months remaining ($1,744)
- Must drive used vehicle for 82 months which by then is almost nine years old
“Realistically speaking, how many people are going to buy a used Nissan Altima that already has 30 months on its history and continue to drive it for another 7 years?” added Stiberman. “With today’s lease deals you could drive three new cars and pay the same price over the same time period. The only thing you’d miss out on is the $500 your used car might be worth at the end of the rainbow.”
LeaseTrader.com, the most recognized name in car leasing, easily and affordably matches car shoppers with individuals looking to escape their auto lease. For more information you can visit www.LeaseTrader.com, on Twitter @Lease_Trader, or call 800-770-0207.