Buy vs lease musings

[TheWombat]

While we wait for the Explorer 2020 to arrive I thought I'd start a thread around buy vs lease thoughts to get people's perspectives. While I am starting this based on my own scenario please feel free to add your own to the discussion.

Scenario: Mr & Mrs Wombat, 2 kids (4&6)
Existing cars:

• 2011 Mazda CX-9 GT AWD (Mr Wombat's) 122k miles - bought used in 2014
  
• 2009 LandRover LR2 (Mrs Wombat's) 105k miles - bought ex-demo in 2009
• 2019 Abarth 124 (Mr Wombat's) 2.5k miles - bought new as fun car for nice weather

We have always bought cars and in general hold onto them (with a couple of exceptions due to specific circumstances). Mrs Wombat is not into cars, and so long as the car has a high seating position, good visibility, is not too big and has a reversing camera she is ok. Hence we'll keep her LR2 until it has significant issues and then just buy a replacement small/medium SUV.

I'm looking to get the Ford Explorer ST (street pack & technology package) to replace the CX-9. This is our main transport for skiing vacations and other road trips. I do enjoy cars and given the choice would swap every 2-3 years (or more frequently) except for the hassle of buying/selling and the economics of it.

I would therefore typically considering buying a new or lightly used Explorer ST and keep it for 5-10 years. However I'm considering whether it makes more sense to lease initially for two reasons:

• the 2020 Explorer being all new there could be some issues that are uncovered in the first year or two
• the 10.1" center screen is appealing but on the photos looks like an after thought

I would then look to buy a new model year at the end of the lease (or buy the leased car) and keep for the usual 5-10 years.

One of the reasons for replacing the CX-9 now rather than just waiting a year or two is that the AWD is broken (a common issue in them) and it doesn't make sense to fix.

What are other people thinking?

TheWombat

 

[Jon M]

Having done it multiple times, I would never buy the first year of a new body style. That said, I would also never lease a vehicle; Dave Ramsey calls them a "fleece" for good reason. In your scenario, I'd buy something else, like an '18 Sport, and drive it until the 2022 comes out.

 

[peterk9]

I've heard multiple times that if you plan to buy your vehicle at lease end, it would be less expensive to buy it in the first place.
My next vehicle will be my 8th straight lease.

Peter

 

[RhinoQuartz]

I've heard multiple times that if you plan to buy your vehicle at lease end, it would be less expensive to buy it in the first place.
My next vehicle will be my 8th straight lease.

Peter

Would you happen to know why that might be?

 

[peterk9]

Would you happen to know why that might be?

Not sure of all the reasons but if you buy it at the end of lease there are additional fees that you must pay. One would be registration since a leased vehicle ownership is not in your name, safety inspection and dealer fees. They don't just hand it over. I am sure there are other reasons as well.

Peter

 

[RhinoQuartz]

Not sure of all the reasons but if you buy it at the end of lease there are additional fees that you must pay. One would be registration since a leased vehicle ownership is not in your name, safety inspection and dealer fees. They don't just hand it over. I am sure there are other reasons as well.

Peter

Oof that sucks. Can't say I see a lease in my future though, 3 kids with a dad who doesn't detail are not a good combo for one.

 

[peterk9]

I think if you plan to keep a vehicle 5+ years, you're better off buying it outright. I keep mine for 3 - 4 years.

Peter

 

[AdrenalineJunky]

I would never lease. Too costly for exceeding mile allowance, which is low.
You are also buying the most expensive and depreciated portion of the vehicle.
I see no advantage especially with new simplified tax codes utilizing reduced deductions.

 

[peterk9]

I would never lease. Too costly for exceeding mile allowance, which is low.
You are also buying the most expensive and depreciated portion of the vehicle.
I see no advantage especially with new simplified tax codes utilizing reduced deductions.

Leasing isn't for everyone, especially for high mileage drivers although leases have different mileage allowances and the option to buy extra miles. No simplified tax codes here. With leasing, you don't get into paying for many of the expensive repairs noted in this Forum. Also, I haven't had to buy tires for 8 years. Mine vehicles have always been under warranty. Basically, all I pay for is regular maintenance and gas. In my situation, I would not buy a vehicle again. It basically comes down to preference and one's circumstances. There are Pros and Cons to both systems but leasing is becoming much more popular.
https://www.usatoday.com/story/money/cars/2016/03/03/report-more-new-cars-leased-than-ever/81286732/

Peter

 

[TheWombat]

Thanks for the various perspectives. I have been considering a 17/18 Sport as an interim option and then either buying the 6th gen new in ~2022/2023 or buying a used one.

Going for a 17/18 Sport would save ~$20-25k, perhaps more, compared to the new ST which is obviously a fairly significant amount. However I would want Captains Chairs in second row, plus cooled front seats and blind spot monitoring which will limit the available used cars as majority don’t seem to have those options.

Also if looking at a used 5th gen Explorer then there are a number of competitive alternatives which can’t be ignored.

I’ll wait to see what the road test reviews of the 2020 ST say as I have a few months to decide since I would like to replace the existing 2011 CX-9 before November 2019 if possible.

TheWombat