“People’s attitudes are shifting,” said Philip Reed, senior consumer advice editor at Edmunds.com. “The car is being seen more as a commodity to be used and then returned. Ownership was a big part of the World War II generation — people wanted to own their house and own their car. They were taught that was financially responsible.”
There are reasons certain people might want to lease (the first one being you have extra money to burn). But for the rest of us, the financial consequences are worth re-examining, especially when you have a slew of competing financial priorities like college tuition, retirement or even a nice vacation.
So let’s start with the hard numbers. Mr. Reed looked at three ways you could acquire a four-door Honda Accord EX: buying a new 2014 model, leasing the same 2014 car, or buying a used 2011 Accord with 36,000 miles. (Many people in the New York area are paying about $28,211 for the new car, including tax, title and registration.)
The analysis looked at the cost over six years, since the average person owns a car for that long, and it incorporated typical buying patterns: the new Accord is purchased with a five-year loan, the used car is financed with a four-year loan, and the person who is leasing must take out two consecutive 36-month leases. (The rest of the assumptions are detailed on the accompanying chart.)