By: Queue Murphy
Once again, I went way over my mileage on my lease. I do not like leasing vehicles. I tried it again this year and once again, I have gone way over my miles, even though I purchased extra. I do much better when I purchase vehicles. I now have to pay $0.20 cents a mile overage, which means I have to bring a check to the car dealer when I turn it in – and believe me, they count on that income!
The average person owns their vehicle for 11 years. I have been known to get my vehicle (Chrysler Town and Country) up to 287K miles over 11 years. I am a road warrior. We are a family of road warriors – we love to hit the big road and travel! Being a family of our, airfare is not in our budget.
I do have friends and neighbors that are able to keep their mileage below 12,000 a year – I don’t know how they do it, but they do! Those families have been successful at leasing and get a new vehicle every 2 years, but they always have a car payment. I could do so many other things with that money besides paying a car loan – travel, new clothes, massages, chocolate….mhmmm.
I found a great site by Consumer Reports that explains that someone like me and my family should purchase vehicles instead – and that is what I am going to do in a few months when I have to turn this monster in. As it is, I am purchasing a used car from my dad and parking this one for two months so I don’t rack up any more miles – all while I make a hefty $350 a month car payment – YUCK!
With leasing a vehicle, you only pay back the vehicles depreciation (how much it declines in value), that is why your payments are lower than a loan for a purchase. With a purchase loan, you are paying for the cost of the vehicle plus interest. Once a new vehicle leaves a car lot, its value declines significantly. I plan on purchasing a used vehicle just for that reason.
Here is the consumer report website and it’s a very good barometer to help you determine whether or not you should buy or lease: http://www.consumerreports.org/cro/2012/12/buying-vs-leasing-basics/index.htm.
Our blog next week will discuss various type of loan options for vehicles – which they also discuss in the consumer reporting link.