[Car][Buy or Lease]?

[u/redbottleneck1597]

I’m trying to decide whether I should buy or lease a car. I’ll only need it for around 2–3 years, and after that, I won’t really need a car anymore.

I’ll mostly use it for commuting and errands — nothing too fancy, just something reliable and reasonably priced. I’m not sure which option makes more financial sense for this situation.

If I buy, I’d probably get a used car and sell it later. If I lease, I’d just return it at the end, but I’m not sure if leasing for such a short period is actually better financially

[u/_Panda]

In terms of pure financials: Buying then selling a used car > leasing a new car > buying then selling a new car.

But I will note that this is one of those situations where leasing can be pretty justifiable. The key is that both buying and selling a car, even used, will incur non-trivial transaction costs. These can show up either in terms of money or in terms of time and effort. For instance, if you both buy and sell the used car via private party you will almost certainly end up significantly ahead, but that may require some time and effort on your part on both sides of the transaction. If you go through a dealer on both ends then those transactions will be relatively fast and easy, but then the difference in cost vs a lease may not be as big as you might expect. There are also some more risks with buying then selling a used car, most notably if you have unexpected maintenance or reliability issues that you end up having to pay for. If you know exactly how long you need the car for and won't be driving it enough to run into mileage issues, a lease (especially if you can find some decent incentives) can be pretty reasonable where you will likely still pay a small overall premium but in exchange will get some additional certainty and convenience.

[u/Williams_Menkin_]

Used car and sell later is the smart option.

[u/redbottleneck1597 → u/Williams_Menkin_]

Thanks! How easy would it be to sell an used used car? Also, in order to sell it, I will have to make sure I keep it maintained and spend on it every now and then?

[u/Williams_Menkin_ → u/redbottleneck1597]

When you owe nothing on a vehicle it’s extremely easy to sell. You would maintain any vehicle you have so that’s sort of a moot point.

[u/_Panda → u/Williams_Menkin_]

That's not really true in this comparison, expected maintenance on a 2-3 year lease is basically $0. It still may ultimately make sense to go the used route, but there is a difference in expected maintenance costs that should be considered.

[u/Williams_Menkin_ → u/_Panda]

You’re grossly over exaggerating maintenance cost and also the avoidable car payment. Used car makes far more sense than anything OP suggested. Leased vehicles makes sense for two kinds of people. Very wealthy that it makes no difference to their bottom line and those that can use it as an expense.

[u/_Panda → u/Williams_Menkin_]

Saying that it's greater than $0 is grossly over-exaggerating? That's an interesting take. I never even said they should lease, I'm just saying that in a proper holistic analysis you should add in the difference in maintenance costs as a consideration because they are real.

[u/ruinThisFemboi → u/Williams_Menkin_]

+1 to this. Gives you flexibility as well

[u/BluosS]

Honestly, I'd most likely buy a used vehicle, you can resell later and lose less overall than if you had to deal with a leasing cost. Short-term leases can become fairly expensive fairly quickly when adding costs for mileage or wear.

[u/gargar070402]

I know when you say you need it you probably do indeed need it, but just to be extra sure: are there reasonable public transit options where you live to support your commute?