Another reminder as a mechanic- just because you can afford to purchase a car, doesn’t mean you can afford to own it. I come across a lot of Benz owners who can’t afford repairs. Maintenance costs can vary widely between different vehicles

0% interest on a used car you own without payments is the best feeling rather than leasing

I learnt to manage my money through investments and it really works for me. They say money can't buy happiness but poverty can't buy anything.

Back in the day, you used to watch out for balloon payments at the end of your car loan. You might pay $200/month for 4 years, then owe $2000 as your final payment. You would basically pay off the loan, then be screwed in the end and the dealership would repossess your car, which they could then resell. I think of leases as modern balloon payments. The "$4000 due at signing" being the up front balloon payment and after paying for 36 mos (or whatever the lease period is), you own nothing and the dealer can "resell" the car. They're always looking for ways to sell the same car twice.

I just skimped out of buying a car. I cycle to work, travel from city to city by train and use my cheap ass motorcycle tot go to obscure places far away. If I need to haul something I rent a van for a couple of hours.

Woooowww you guys seriously have perfect timing!! I was seriously considering leasing a new vehicle asap as my company is putting in place a new return to office policy in September. Thank you for all the information! I especially liked the "Lets run the numbers" bit! You guys are amazing!!

My mom purchased a lease on a new car when I was in high school because she was tired of dealing with repairs, etc once she was done paying off the loan. She did all the math and made sure to account for the correct mileage (traveling to work, visiting relatives on holidays, etc) but we still ended up going over the allotted amount. For the last year of the lease, my mom hardly drove the car and I wasn't allowed to use it because each additional mile was so expensive. We lived in the countryside (and this was before modern internet) so it was terrible. Essentially, for the last year of the lease, we were stuck in the house while "our" new car sat in the driveway. Edit: The reason we went over our mileage limit is because we had a few family emergencies that required a lot of driving to different relatives' houses of whom lived out of state.

I love the callback. It really highlights just how Philip has gone from looking the front man for a Weezer cover band to a front man for a Foo Fighters cover band.

Very well balanced video. There is nothing wrong with owning a nice car, so long as you understand how much you are really paying and can afford it. If your financial goals/budget don't allow for it, don't.

As someone whose family owns a car dealership. I heavily recommend leasing a car since its good FOR US. 😅

The US needs to wake up to the reality that car ownership is a money-sink that will only get worse over time between the cost of fuel, insurance, and maintenance. Rather than pushing the costs of participating in society to an individual person to own a car, we should be building infrastructure with affordable and reliable mass-transit for long distance and safe pedestrian/small vehicle paths for shorter distances. We can start moving in this direction by reclaiming local car lanes for smaller personal vehicles like scooters or e-bikes. This would not only help individual finances, but also start reversing emission trends that are cooking the planet.

It really all depends on your use case. If you want something to get you from A to B and you plan on keeping it forever, then buying and financing a used car is probably the cheapest. With certain brands, it's better to just lease it because maintenance and repairs are crazy expensive. With EVs, you should definitely lease. If the battery dies, that will probably mean the car is totaled because the price to replace the battery can sometimes cost more than the price of the car. EVs also depreciate the most out of all other types of cars.

Thank you so much for this episode! I've been dreadfully confused for the longest time why people lease cars. And when I'd ask them about it, they didn't have straight forward answers about whether you own it or not, and how repairs must be done

I bought my girlfriend's car in cash when mine died. I'm allergic to interest payments!

I'm lucky enough to both WFH and live in one of the only US cities with a good transit system. If I was suddenly carless, I could take months to save up / compare options / find a good used deal and it wouldn't cost me my job or quality of life. Most of the US is constructed to keep people trapped in expensive cycles of car buying/repairs - just a few days without transport and you can lose your job. We should push for better options for everyone!

Here’s an idea, get a used car. Don’t buy that you can’t afford.

I love the "Run the numbers" section. This, along with The Plain Bagel is one of my favorite financial YT channels ❤

I remember driving around Florida in the 1990's and seeing the words "Lease" on the bottom of the license plate where normally the county name would go and you could easily tell who was leasing their cars. I'm pretty sure their is no Lease county in Florida.

I love your videos so much. They take something quite complex and make it easy to digest. Thank you!

CPA here. If you finance a purchased vehicle, you deduct the loan interest and the vehicle depreciation (sometimes all at once in first year). Usually better tax benefit than lease payments.

I really appreciate the animations and graphics! Love your content, always full of value :)

I really appreciate y'all adding in the cost of repairs for this video. That's honestly something I was really curious about with your other video on buying a used car vs a newer car. Since the older a car gets the more you'll likely have to pay for expense repairs/maintenance. So I'm always curious how that fits into the equation as well.

Just got my first car. It costs me $60/mo. My biggest financial tip to achieve similar numbers is to have the car handed down to you for free and only get the liability insurance because it's a 25 year old piece of junk. I love my car ❤

Would love to see the “run the numbers” factor in EV tax credits with the IRA. For example, if you buy a Hyundai EV, you don’t get a tax credit because of IRA rules. But if you lease it, the dealer can get a $7500 tax credit which they can pass in part or in whole to the person leasing the car.

Depreciation, such a funny word... I bought a used motorcycle 5 years ago for 6000 EUR, sold it few months ago for 6500 :)

The car is the new home unaffordable.

We've settled into our 90s cars, bought for a couple of grand each 10 or so years ago. With only a small annual budget for consumables and repairs (there's not much to go wrong, if you choose wisely), we're enjoying driving modern classics that are now appreciating and can still impress. Win win.

Love your guys’ videos! I’ll feel better driving my 15-year-old van today, while looking around at all the newer, fancier vehicles around me. We were blessed to be able to buy it for cash 8 years ago, it still works, and even still looks good-just not new. I already knew about how bad leasing is, thanks to Dave Ramsey, but I appreciate the reinforcement!

What i did after my wreak in 2020 is i got a certified pre owned(CPO) 2015 toyota camry hybrid for 18k and ive paid half of it now in 2023 and its been problem free. Hybrids for toyota dont have drive belts the brake pads last around 100k miles so i do the 5k oil changes and all the flushes( including transmission and hybrid coolant) and the thing feels so good almost new still. (50k miles is when i flushed everything for about 1.5kusd.) at 77k miles now.

Used cars are typically the best option for most people. A 5-10 year old car can still be extremely reliable. I am not a big fan of payments of any kind.

Dang, your content is really great! Straight forward, running the numbers, etc. 10/10!

'07 Ford Mustang, just did 100K miles service on it... Probably own it until I die.

Interesting, but there is another point of view (actually my case now). Let’s say we invert the table on Ali and Michael, and they both want to buy a $20k car, but one is new, and maybe less well equipped, and the other one is approved used, but has about 4 years and 25k miles on board. For the lease, where I live, I would end up paying, say 300$ a month at 2.5-3.5% interest, while for the loan for the used car I would end up paying 600$ at 5-6% interest for the loan. If I take the value of the residual and divide it by the number of month I lease, deciding I want to keep the car, I can just put that in a savings account or something getting me a bit more, like money market, bonds, or if I feel adventurous, an index fund. Essentially, in this way and for this particular scenario, leading might end up cheaper than the loan, and I would be left with a car for maybe 3-4 years longer than if I would have bought used. But of course, everybody’s situation is different :-)

Lease agreements calculate the value you have to pay based on the predicted depreciation of the car over the lease term. This depreciation, treated as a debt, is subject to interest rates and fees, which are influenced by your credit score. Depreciation underscores the financial risk associated with owning a car, as its value diminishes significantly in just a few years.

What I like about these videos is it's "let me teach you, so you can make an informed decision" so thanks!

This video is golden! As an Accountant, Tax Strategist, and awaiting for my CPA license, I would never lease due to the mileage limit and you are always going to have a payment as long as you are leasing. If you have a business vehicle, you can't depreciate it if you lease it. There is depreciation recapture though if you resell before it's asset life so you would need to think if depreciation is even your best option.

If you have a car in working order, drive it ... and set aside $540 a month for repairs and eventual replacement. I don't understand borrowing to upgrade.

Same thing in Italy, six years ago I bought a used car in cash, spending 10,500 euros while a colleague spent almost 30,000 euros in 3 plus 3 years of rental. incidentally, my car still runs great while my colleague is about to start another 3 years of rental...

I've been your follower since your first very 1st video which help solidifies my mindset on buying a used car... I got a used basic jeep for 3 years, and learn so much from its function of parts, parts availability, maintenance, and more, later on... Sold it... Somewhat hard, but as I grew older, I learned to kill sentimental attachment to material things, it's a money trap... So I step up the game, I recently purchased (cash from savings, save and planned for 5 years) a used 1991 Isuzu MU Wizard SUV (US Version is Rodeo) for PHP 80,000 (around 1500 USD) and reconditioned it costing me 100,000 PHP (around 1800 USD) fora total of... Do the math. This dinged and scratched Used SUV may lack tech and specs compared to Modern SUVs but is still presentable, decent looking, and can do the same thing... Power Steering, Power Window, 4x4, Great Suspension, Automatic Transmission, 3.0 Turbo Diesel Engine, etc... And most of all... Can bring you any place you go if you take good care of it. My point is, if I buy a Brand New 2023 Version of this, a 2023 Isuzu MU X will cost me 2,500,000 PHP (around 45,000 USD)! That is CASH, NOT FINANCED MONTHLY PAYMENT! Imagine that! Moral lesson? Almost ALL Shiny Things like New Car a Money Trap, in not financially planned, but a Used One (with proper research, complete knowledge, and good mechanic) can be a Diamond in a Rough! Be Money Wise!

You put so much work in to your videos and it’s appreciated. Huge fan and thank you so much for all your help!

Great video, but would be curious to see the numbers between leasing/financing the same brand new vehicle

Spot on! I'm fortunate enough to have finally paid of my car and boy does the money start adding up in your favor! I've had my car since 2016 and I would be surprised if I'm any where near 2k let alone 10k in the last 3 years.

I bought a 94f350 last year.... It had 95k odo and we're at 98.5k now. Sure, it practically takes gallons per mile, but it's a hella nice running truck, can do literally anything i ask, and I drive a semi, so im typically only able to drive it on weekends so Idgaf about gas prices. Best 9k I ever spent, and i spent 2k getting the brakes redone. Hoping to rebuild, repaint, do a bit of extra work one day... No matter what, im pretty sure it'll cost less than a new truck, and its the truck I wanted. I love this thing.

One thing that they didn't mention in the video is the cost for insurance. Used vehicles can be a lot cheaper to insure. I drive a 2001 Toyota 4Runner and pay $120 per year for liability insurance. My dad bought a brand new Chevy Blazer and was paying $1800 a year for insurance.

My lesson learned after financing vehicles, if you can’t buy it in full, don’t finance it. I’d be free from my truck payment in two months (free of any debt for that matter), and plan on never going back. Can’t wait for the raise I’ll be giving myself 😅

No leasing! Unless you like throwing away money!

Now listen carefully. My employee leased a Ford escape. Sometime later, it was recalled. Owners ended up paying $3300 for the repair. Because of the lease, he paid nothing!

Does the math on depreciation change, given the used car market is now skewed towards higher end($30-40k)? Used cars are roughly 30% more expensive than 4 years ago, and with higher mileage.

Only a car sales man could figure out how to get a customer to pay interest on a rental. 😂

“Driver don’t pick a car, car picks the driver. It’s a mystical bond between man and machine.” Bobby Bolivia

Great Episode! I have been watching you guys for almost a decade now.

I’ll always be thankful my grandparents sell their cars and buy new when they get to 100k miles, I’ve gotten very nice cars that are only 4-5 years old for really cheap

Riding a bike rather than a car would be the best financial advice if it weren't for the vast swaths of car-dependent infrastructure in the US that force people to drive a car everywhere.

I think if you plan on buying the car at the end of the day leasing could be very helpful! in 2016 i got into a car wreck and my car was totaled. i couldn't afford a new car outright or wait for the perfect used car. I had a very limited month to month budget so the monthly payment was most important. I wanted to buy a hybrid due to getting more out of a tank of gas and how expensive gas is it's important (it's $5/gallon rn). Whatever i got i was planning on purchasing outright. at the time it was significantly cheaper to lease than buy. And you can't lease used cars. so the monthly payment of a brand new prius was actually much less than financing a used prius with the same money down. At the end of the term i got some help purchasing it, but it was definitely the right choice imo. so if the interest rates you can get are low or have a deal for a lease (which i often see) and plan on buying the car outright after the lease is up, it may be worth it still. like say leasing an electric or something significantly more fuel efficient, but is out of your price range, the savings could definitely outweigh the extra expenses. I don't see the point of going lease to lease though and never owning. Hell I wish if you are a renter and stay there x amount of years you'll get an offer to own your condo/house. that's essentially what a lease is. That money isn't thrown away unless you throw it away.

6:19 this is so true!!! It all depends on whether you care about all the extra or not. I have a 2012 honda civic and got a 2016 cr-v with camera which is only the amenities I wanted.

Simple advice if you are buying like economical cars like Hondas and Toyota it just makes sense to buy a new one coz of their warranty, reliability and low depreication compared to other brands. Any car over 30k you should think hard about depreciation and resale value fore sure.

What about buying used cars right now - many are going for over the original msrp with thousands of miles on them, and a new model may be roughly the same cost. Would it worth it to buy new vs used in cases like this? I know in your original video, buying a car 5 years old is best - but feels like that may have changed.

It is really important to note that the average car these days are SUVs and Trucks. 40 years ago people bought sedans but now they want large vehicles. Average prices are really misleading. Love your content guys!

Call me old -fashioned but it's buying for me. I hate the idea that after a couple of years and thousands of bucks in payments you have nothing to show for it.

Good to see this topic resurface. Your original video title says it all and *millions* of people could save so much money over their lives if they can get a hold of this knowledge.

So, I am actually leaning towards leasing (12-month) because I may move away to another country for X period of time. So leasing should free me from having to sell the car or planning for its storage etc while I am away for a couple of years.

It's similar to buying/renting a house. I always make sure there's an option to buy the car at the end of the lease. I lucked out and leased my car that i have now in 2021 right before prices took a huge hike. At the end of my lease, the buy-out amount in the contract will put like $8k of equity in my car lol

What I would add to leases, if you lease a cheaper car, you don't end up spending as much on payments. In the scenario given, person A chose a nicer car. If they hadnt they would be paying half as much, and at the end of the lease you would have the option to buy the car. After making payments to the dealer and paying that value, your buyout price is much cheaper. Even if you take out a loan you still won't be paying as much as if you had bought it in the first place. If you want to buy a brand new car, try leasing it first.

In Europe, we call this model an operational leasing. We also have something called financial leasing, which is exactly like loan just to a car dealer. They will earn money on car but they will allow you to pay it off at somewhat stable monthly rate. Car is yours after you pay it off and you are not limited in millage. Example, my car costed 27 999 euros. You had 20% deposit (you can go up to 50%) and I have 435 euros monthly rate and after 60 monthy, I will pay them 31750 euros but car is mine. Maintenence is included but insurance is mandatory and I have to pay it.

Would love a ‘Run The Numbers’ On the tax deductible business expense!! Thanks for this vid :-)

Due to inflation my 2009 car is still worth what I paid for it when it was 3 years old, 11 year ago. If you intend to keep the car, it always works out cheaper to buy.

I got a lease recently and it works for now. Didn’t have the money to buy a vehicle, was able to get electric car leased for 1year during which electricity charging is free. monthly payment is less than I was paying for gas. But I will look to buy after this because I doubt I’ll find the same deal.

loved this episode's run the numbers, well done!!

This is great! One issue I have yet to see discussed -- Might leasing make sense for somebody who was considering an electric car? Right now it seems that a lot of such cars are running into really expensive technical problems 4-6 years in -- right when a lease would run out. (I'm not currently looking at electric cars -- very happy with my 2013 Honda Fit. :) )

04:13 the real reason why leasing exists

I love your mini series on cars and transportation. I think they are the single highest cost weighing down millennials. A lot people simply don't know that there are other more affordable ways to get around, that by choosing to live in a certain area, that you have to factor transportation to get around in that area, that you don't have to buy a new car and take out a ridiculous loan. Anyway, I would love to see a video on what to do after a car accident. My husband and I don't really drive a lot and we have found ourselves navigating the horrible communication channels of car insurance after a recent accident. The accident wasn't our fault, so we were waiting weeks to hear back. It took our insurance company contacting their insurance before they took any action. Even after all that, our car is likely going to be deemed totaled and we will likely not receive the amount it takes to buy a similar car on the market. The whole situation has made us really lost and wondering what the best options are. I thought about just driving the car home because the mechanic says it's safe to drive and fixing it myself. It's all cosmetic damage, just a new bumper and head lights to install, nothing that I even have to get into the engine for but after looking into the complicated mess of insuring a totaled vehicle, we decided against it. It's just really sad to have a car that's totally functional go to waste simply because the insurance company doesn't want to pay an over priced mechanic to put on a new bumper and headlights, but it's the reality.

I drive vehicles that are at least 20 years old. I do all my own maintenance though and wouldn't think much of changing a motor in a car. I once blew the engine in my '69 Checker on a Wednesday. I pulled the engine out Friday evening after work and drove the car to a car show Saturday afternoon with a different engine in it.

Have never leased a car and never will (unless I get a really bad medical diagnosis and want to go out in style). I understand why people do it - it's not necessarily stupid. I do think though that one of the reasons people lease is that they drastically overestimate the maintenance cost of a vehicle that's between 3 and 10 years old. Sure there are some maintenance costs, and there may even be a few largeish repairs. However it would be rare for this to exceed the cost of a new car. I appreciate that you added the 10K of repair cost, even though I think that's probably well above what it would really cost.

I leased my last car and couldn't be happier. It had 3 free oil changes and maintenance and very good warranty. It was $300 per month for 3 years. And it was 15k miles. At the end of my least, i still had so many leftover miles and i was able to get more money back from it then the original residual value. I cant remember the math good, but it was maybe total of $5k in 3 years which wasnt bad for a brand new car.

This probably the earliest I seen their videos once it upload.

Buy a car outright if you can, if you don't have that option then at least put a sizable down payment. Leasing is just an absolute waste of money.

I'm thinking about buying a used Tesla. 2021, 46k miles, for 26k. There is a used EV credit for $4k is the sticker price is 25k or less, is this a good deal?

A lease worked great for me when I knew I would only need a car for the short term. I didn't have to go through the hassle of trying to sell it.

I buy, and have bought 2 vehicles in my life brand new becaue of a zero percent rate.. Reason is, I keep vehicles 10 years plus. My dad always said, lease is good, then after the lease you drive the car back and have to walk home. Right or wrong, Im 50, works for me.

I love Two Cents!! This video and the first “How Cars Keep You Poor” helped me make my best decision in buying my first Car at an AMAZING price and with awesome APR. Yes some emotional thought also played its part lol! I had to make sure I liked the car also! But for the most part I stuck to financial advice and intelligence to Make my final choice!! Yes it was Used with great low mileage and I am also able to save the same amount as I pay monthly and it’s just a little under 5 Years old!! Awesome advice and Great job! Thanks for keeping us fellow newbies up to date with financial advice!!

My father bought a car in 2013 For my brother he used it for 4 years then he got old enough and bought his own car He gave me the car and i used it for 6 years now And i still use it and i will continue to use it until it absolutely break down for good I love that car so much Sure i did need to repair it once everywhile i mean that is to be expected for an old car as long as u plan for it its nothing serious But what i can say for sure is that it is absolutely worth it to buy a car and to take good care of it treat it as your son

Cars made past 2010 don’t last that long whether it be transmission, engine or some others random repair also both (new) cars depreciate a certain percentage once driven off the lot and reputable dealers sell certified pre own at higher tags especially if the cars history is great. I feel like there are some factors missing but overall very informative 😌😊😊 Love these two

This is by far the best video I’ve seen on this subject. Thank you!!

Got rid of my car payments with two vehicles owned out right, and a beater to save mileage and gas. My 3 reliable vehicles cost me less than 10k put together, have been reliable for 4 years ive had them, and I never had to compromise on what I need a car to do. I have a 4x4 for camping/rough roads/snow/hauling etc, an economical gas sipping beater gets 38 mpg, and family sedan for long out of town trips. I do work on and maintain my cars myself, so ive definitely saved a ton on repairs and maintenance. Best skills ive got from KZfaq.

I'm so excited 😊, my life has totally Changed since I invested $3,500 and now make $31,900 every 10, days. God bless Expert Michael Allen

Pretty simple... are you a business? -> lease Are you not? -> buy Good video guys

Not really a super fair comparison buying a used car vs leasing a new one. You should run the numbers on two people either buying or leasing the same exact new vehicle, and see how that turns out. The numbers will run a lot closer once you include average repairs costs. Sure, buying is better, on average, but if you get unlucky with your vehicle and it gets outside of warranty and you have to make major repairs, leasing can end up being just as good financially, Especially considering the stress of being stranded, paying for the repairs, etc.

depreciation isn't really happening where I live. I bought a 2012 car used for $3600 two years ago and just sold it for $5800, no inspection. It's wild out there right now.

I love how detailed this was thank you for the amazing content

I think I had a pretty unique case, I have epilepsy but it took them years to say you can’t drive with it. I knew it was coming somewhat surprised it didn’t happen right away. So I lessened my last car as I didn’t want to get stuck with it after they said I couldn’t drive 2 and a half years later I got the you can’t drive later from my doc, and was able to return it and save about 1500 on the remaining balance. Now in those years of having it I only drove 13,000 miles and half of it was visiting my family in other states. I already worked remotely so no commute.

Lease luxury cars, buy economy cars. Simple as is.

i was just wondering about this! thanks you two

You two are just an original! I really love your videos. I have an idea for a future episode: You often give the advise to talk to friends or family for help or tips. But I‘d be interested in some tips for talking about finances with friends. For example my best friend has made some bad financial decisions in the past and is now slowly getting up to speed and into financial health. And still always when he saved a little he makes impulsive decisions, like buying an Apple Watch he doesn‘t wear or getting a second animal. He‘s very important to me so on one hand I don‘t want to risk a fight, on the other hand I‘m worried about his future…do you guys have an tips on how to break the ice? All the best from Germany!

I have a HONDA CIVIC LX sedan that I purchased in 2003. Still on the road. Good maintenance goes a long way. Also not having computer chips in the car, makes it easier to maintain.

I ran the numbers as well. I calculated total ownership costs over 5 years to leasing THE SAME CAR, and my monthly costs were about equal. I took into account the cost of tire and break replacement, repair costs based on internet info averages, and the opportunity cost of a potential down payment and/or higher monthly payment for purchase. If one lucks out, repair costs could be lower than average, but it could also go the other way. I would also want to pay for CAA here in Canada once my car was no longer covered by roadside assistance, but I didn't include that in my calculations. By the way, if your mileage on a lease is under what you signed up for, you can bargain to receive positive equity. My wife received over $5,000 on her car, and I got $2,500.

Um it makes me psychologically LESS secure when I have a leased vehicle. With my own car I'm free to damage the interior when I go on a road trip and not have to worry about charges.

My car is 5 years old, bought it used over 2 years ago. And boy am I enjoying the no payment lifestyle! It includes what I consider to be the best luxury feature ever; a pink slip with MY name on it. Not a bank's name, my name.

Thanks a lot for this video! Just what I need at the moment!!!

1:30, shots fired! 😂😂

Businesses with a loan also get to take depreciation expense, not only interest