the time has come…
this past weekend, i’ve decided to cut off my current car (94 accord) and not spend anymore money on it (besides gas, temporarily). i’ve been contemplating between buying (financing) and leasing a new car. any thoughts out there??
it is obvious that buying, ideally, makes more sense since you’re actually “owning” something that can be figured into your net assets. but unlike a house, a car’s value rarely appreicates or even hold up its own value. so the depreication in the value of the car is inevitable. do i really want to own a ticking time bomb??
if you consider the maintance costs of keeping the car after you’ve paid it off (i.e. timing belt, new tires, all sort of fluid flushes, etc.), i’d imagine that you need to be payment free for awhile to compensate for the amount of money you put up to buy the car. a car that’s losing value day after day, i might add. meanwhile, you’d have to assume that there would be no breakdowns/major repairs that would creep up and smack you in the face.
as i know personally, that doesn’t happen. (my car’s tranny blew out a few years ago, then there’s also the great flood of ‘99, not to mention accidents that it’s gone through before i inherited it.) a few months ago, when i took my car into the mechanic, my exhaust was pretty much completely rusted and my timing belt was wearing out. i trust this guy, and knew that he gave me a very reasonable price. since the car is still under my mom’s name, i called her to ask her what she wanted to do with the car. to make the long story short, i felt that i was pressured into fixing it by her. if i had the choice to do it over again, i’d just let that thing rot.
fast forward a month or so to last weekend, i was driving back from dallas to austin and hit a pretty bad rain storm. my car pretty much lost traction since it was raining so hard, as i hit the gas, i can just hear my engine revving (but the car’s not going any faster). and my first thought was “oh ****, tranny again.” but luckily, it wasn’t. it was probably just that some of the tires are old and need to be replaced. now my parents want me to buy new tires for the car.
i’ve pretty much decided that i was done with my accord. in the last year alone, i’ve had a new radiator installed, new timing belt installed, replaced essentially every single hose under the hood, replaced the exhaust system from the cat. converter back, flushed out the tranny fluid, cleaned the fuel injectors. and where does that leave me?!? here’s a sad, but true stat: i’ve spent more money on repairing my car this year than i’ve spent on groceries!!! WTF!?!? Who does that?!?
yeah, so as i’m writing this i, too, am wondering what was the point of fixing all of that if i was gonna just give up on it. but i just can’t sit here and wait until the next thing goes wrong and i’m stuck with the decision of fixing it or going to the dealership and getting a new car because if i do that i’d have absolutely no bargaining power and would pretty much end up putting even more money into this bloody car.
so here’s the issue at hand, buy or lease? right now, i’m leaning towards leasing. as you’d expect from my previous experience, i have absolutely zero interest in dealing with car repairs anymore. so the thought of getting a used car is pretty much out the window. when it comes to getting a new car, i’m really seeing that leasing is right for me. i will be running the numbers this week when i get home, and we’ll see if the results will reflect my theory. typically, most people never end up paying the full loan out on their car before they trade it in for another one. in this situation, it is rather obvious that you should lease instead of buying since the residual value of the car is predetermined at the start of the lease, you wouldn’t have to worry about being upside down on the loan.
more on this later. fomc policy is due in a bit.
I will contribute $10 to the pete tam car fund