Southern Belle in Training

Fashion, Travel & Lifestyle Blog || Est. 2012 || Charlottesville, VA

April 12, 2021

I Love Leasing My Car: Why I Leased Again + A Mistake To Avoid.

     Last spring, I began my first car lease. I felt that I had well researched buying vs. leasing, and was confident in my decision to choose leasing. I loved my car, but was already excited to think about getting a newer vehicle at the end of the three year lease term. Three years was a timeframe I felt great about! What I didn't expect however was having my brand new car totaled after just 10 months of having it, thanks to a deer jumping on it while driving on the interstate. 

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     Suddenly last month I was car shopping again for the second time in less than a year. I immediately started wondering if I had been stupid to lease the year prior when the car was already gone. I felt very confused for what to do about my next new car. Should I buy used, buy new, or lease again? 

     I'm sure you can guess from the title of this blog post that I ended up leasing a second time! Woo hoo!! Last spring I wrote this blog post that detailed the reasons I decided to lease vs. buy. All of those reasons still ring true for me a year later and with my second leased vehicle. Now that I've been through the lease signing process twice and have also dealt with a serious accident in a leased vehicle, I feel a lot more confident to blog about the pros with leasing then I did last year when I was brand new to all of it. 

    I am not a car expert- quite the opposite actually. I know very little about cars and was a complete stranger the car buying process until I went through it the first time last spring. I'm writing this post with other non-car people in mind. You might still be driving an older car or your first car (like I was until last year!) and also never have thought much about getting a new vehicle until you're forced to get one. Maybe you don't know anyone personally who has leased or you've only heard bad things about it. I hope this blog post will highlight some of the positives to leasing that you might not have considered.  I'm definitely writing this from the perspective of a non-car person to other non-car people. 

My first lease experience: 

     I wrote about that in detail in this blog post from last year! But I'll give you the short version here. Until May 2020, I was still driving my first car from high school. I was hoping to keep it until 2021 or 2022, but last spring the repairs became a lot more expensive than the value of the car, so it was time to unexpectedly car shop. I had always been curious about leasing, and decided to give it a try. In my area, used car inventory was at record lows during the height of the pandemic last year, so there weren't many good used cars to choose from to buy. I felt that buying a brand new car was a bit out of my budget, and I'd always wanted to try leasing so it seemed like the right time. I don't drive a ton weekdays so I wasn't worried about going over the mileage limits, and I liked that it was only a three year commitment. I ended up loving the car I leased! I also liked that I could buy it at the end of the lease term if I liked it so much that I didn't want to part with it. 

Having an accident (not totaled) with a lease: 

      10 months into driving my first leased vehicle, a deer hit me on the interstate. (Literally- the deer hit me! I didn't see it until it had jumped on my car while I was in the fast lane.) Because the airbags didn't deploy and I wasn't injured, I was hopeful the car wouldn't be totaled. Unfortunately, there was significant internal damage in addition to the external, so my insurance company declared it totaled. I was so upset to hear this- not only is it scary to be in a serious car accident, but I couldn't believe I had to get a new vehicle for the second time in less than a year, and the second time unexpectedly at that!
     I had no idea how to handle things with insurance and my financing company post-accident with a leased vehicle...but in some ways it ended up being an easier process then if had I bought and was financing the car. The manager at my car dealership was helpful in explaining to me how accidents work with leased cars. First, he explained to me what would happen if the car was in an accident but it wasn't serious enough to be totaled. In that case, it still would've significantly depreciated in value. So even if it had been fixable, I would've been lost a lot of money in trade in or resale value someday. Had it been fixable as a lease, my finance company was entirely on the hook for the depreciation post accident, not me! So that's a huge plus right there.

Having an accident (total loss) with a lease:

      Next, my dealership manager explained to me what would happen in the case of a totaled lease- since that's what ended up happening with my former car. With a totaled purchased car, if you outright own the vehicle at the time it's totaled, the insurance will make a payment to you for what they deem the car was worth. Oftentimes though they undervalue it, and you end up losing money, which really stinks! Most car leases include something called gap insurance, which works with your car insurance in case of a totaled lease vehicle. The gap insurance will step in to pay for the remaining balance that your car insurance won't pay, so you'll be off the hook financially. For example, with my totaled lease, I think my regular car insurance valued it around $15,500. That number is several thousand dollars lower then what the car was supposed to be worth at the end of the lease term in two years... so if I didn't have gap insurance I still would've had to pay off the rest of a totaled vehicle. Yikes! Really thankful that my lease payments had gap insurance built in. My lease financing company handled reaching the gap insurance for me, so I didn't even have to deal with calling them myself which was great! Another advantage to leasing that I discovered with my former car being totaled was regarding Virginia's vehicle property taxes. Virginia requires residents to pay a twice a year vehicle property tax to your local county or city (not through the DMV- totally separate than your annual car registration). Had I owned the vehicle, I would've been responsible to contact the county offices and prove to them my car had been totaled, and sort out what I had owed for taxes. Since I leased, my lease financing company handled contacting the county on my behalf! They will arrange for the tax I owed for the last few months on my old car to be bundled in with whatever I'll owe on the new car into one bill. 

Why I leased a second time:

    While I did think it was worthwhile to consider purchasing a vehicle this time around (especially since used car inventory is at higher levels than it was last spring), I quickly realized I wanted to lease again. All of the reasons that I thought I made a good leasing candidate last spring still rang true this year! I love that leasing allows me to drive a brand-new car for around the same price as a used car payment. I love the safety and security of driving something brand new. My first car from high school had a ton of issues in the last few years I had it, and by the last six months I practically had AAA on speed dial. Aside from oil changes and inspections, I shouldn't ever have any maintenance in the first three years with a leased vehicle which is amazing! One other point that I think is so important to consider is that purchasing a car means you are purchasing a depreciating asset. The second you drive a car off the lot, new or used, it goes down in value. And it only continues to. Buying a car is not the same thing as buying a house and shouldn't be compared to that. Buying a home is an appreciating asset- if you take care of it and the market does well, you can most likely make money back when you choose to sell. And home ownership also has tax benefits! Buying a car will never make you more money back when you sell it, and there area zero tax benefits to buying vs leasing. Is it annoying to always have a car payment with long term leasing? I guess? But I'd personally rather have a car payment every month to drive something new and fun (and safe), rather than an older vehicle that might start having surprise maintenance issues frequently. The only time I don't think leasing would be an advantage is if you know based on your driving habits that you would exceed mileage limitations. I am confident in my lifestyle and driving habits that this would never happen. In the 10 months I had my first lease, I had only used 50% of the mileage allotted for the first year! 

The mistake I made with my first lease: 

     I did make one big mistake with my first lease that I didn't make again this time. Since I wasn't prepared to get a new car last year, I wanted a very low monthly payment. So I made a pretty hefty down payment that I pulled from my savings account (hefty as far as leases go) so that I could get a pretty low monthly payment. Unfortunately when the car was totaled, everything that I had invested into it so far (the down payment and 10 months of monthly payments) were gone. Nothing to trade in towards my next lease. Obviously I didn't expect to have the car totaled... but it did happen, and it sucked to know that down payment was doing me zero good now. This time, I put no money down and opted for a higher monthly payment. I genuinely hope I'll never deal with a totaled car again, but if I do I won't feel as badly about financial losses.

   

  I know this post was lengthy- but I hope it's helpful! When asking friends and family for car advice both last year and this year, I have found people tend to be really passionate about buying or leasing, but not both! My hope is that if you've only had experience buying cars, maybe this post will have you look at leasing a little differently, or see some advantages you hadn't considered. (And if you're wondering what car I'm leasing this time- see this blog post!)

     Sharing a few of my favorite keychains below, including the one I bought for my new car:



     God Bless,


     xoxo Annaliese 

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1 comment

  1. Great post! I thought about leasing my current car but with driving out of state 1-2 times a year to visit family, I would put too much mileage on a car so I ended up buying mine.

    My MIL used to lease her cars. It gave her the chance to drive some nice cars until she found one she loved.

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