Another Lease Vs. Buy Thread


So decide and add what you thing I’m missing. Buying a New Highlander XLE $41000 w tax and interest about $49,000. Drive about 15k miles per year for 10 years. End of 10 years vehicle is worth about $8000 so the numbers look like this: $49,000 - $8000 = $41,000/10/12 = $342 per month. No including maintenance and tires. Assuming Toyota reliability, no repairs. So buying cost $41,000.

Lease $400 per month (15k) x 36 = $14,400 plus $1000 DAS = $15,400 x 3 = $46,200 (9 years) plus 1 more year ($4800 + 300 DAS) = $5100 = $51,300. May incur tires, but not counted to keep things even. Leasing cost $51,300.

Buying is cheaper, if no repairs, but driving an older vehicle, which may matter to some, some won’t care.
What do you guys think? What did I miss?


not sure where you’re getting the idea that a Highlander in 10 years with 150k miles will be worth $8k but i think that’s optimistic.

There will def be repairs, cars today have alot of electronics, they go bad, doesn’t matter the brand and repairs are often costly. You might have less repair on Toyotas than other brands but my buddy got a Highlander recently and had all sorts of transmission issues and the car had 10k mi on it…

People have been getting Highlander XLEs for less than $400 without any DAS so there’s that as well. If you can’t hack it yourself you can always use a broker to get one from you.

And then there’s the obvious: Warranty coverage, the joy of a new car without issues, the latest safety features etc etc but this has been discussed to great length so you can search for those discussions on this site.

Also, someone on this site recently mentioned 2020 is a redesign for Highlander, prob a good idea to get a deal on a 2019 leftover lease if you can wait until later in the year.

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Ignoring specific brands, the used/lease debate changes a little bit based on size of car. Everything cost more on bigger cars. Oil change is gonna be a 1.5x-2x more than a Civic, tires will cost 1.5x-2x more than a Corrola. I got two new axles installed in my 2008 Civic for 800 bucks, how much you think those cost for a Highlander…I’m seeing the part costing 3x as much. Assuming you can get away without new tires and time it so car needs an oil change right at turn in that’s like savings 20ish bucks a month over 36 months versus getting tires/oil change at what would be lease turn in time.

If you lived somewhere where taxes are a big issue, say MA (annual)/MD (upfront) or VA (both) it changes the math, but that’s not the case. I live in VA and I still lease my family SUV cause I still think it makes sense for safety/fuel efficiency gains in new models/piece of mind/avoiding regular and unscheduled maintenance etc…


Good points, but I bet your friend is an exception with tranny problems, because I know 3 that haven’t had any problems. For a lease with 15k miles at my local tax rate of 10.25% its right around $400 per month with about $1000 DAS plus 9 MSD’s that I didn’t add to complicate the comparison. This is the current rate for a lease, April had better numbers on it, so it got worse in May, closer to the new model. Edmunds provided the $8000 value for private party sale. Toyotas and Hondas often sell for more than blue book value around Socal. I just sold my wife Honda and I valued it at blue book and got bombarded with offers, I could have asked for more, it had 174k miles on.


If you consider insurance, then buying the car will save a lot more than leasing… Especially when you can drop the collision/comprehensive coverage.


Insurance is a good point. Insurance just went up on wife’s new car, granted Honda to BMW but still, even if it was a new Honda it would have gone up. Yes, there is a cost for new things, that’s a choice we all make. Old stuff is cheaper, but it’s old. :slight_smile:


But how do you know yours won’t give out at 50k? I know everyone always goes Gaga over Toyota’s reliability, but I’ve seen them stranded on the side of the road too. You may have less risk with a Toyota, but you never know when a machine will break down.


It’s been documented by publications for decades that Toyota and Honda are more reliable, not just “I know a person” type of thing. So it’s more than just “gaga”. Just like a Range Rover will give you one of the worst reliability experiences. Stranded on the side of the road could mean have various reasons, bathroom, out of gas, flat tire etc. Not to nit pic the subject but generally speaking Toyota and Honda are pretty cheap to operate. Even if you have a $2000 repair, you’re still at less costs than leasing, if that is what you’re looking for, lowest cost.
I get the new car thing, with safety, probability of no breakdowns etc, but it does have a cost. Just like getting Starbucks coffee everyday vs. Folgers at home.


Here’s some things I always tell people in this debate to think about:

  • Are you actually going to keep the car for 10 years? I know PLENTY of people who say this while they’re trying to pay the car off. But as soon as its paid, they’re looking into another car. If not sooner (negative equity in most cases). Not to mention, personal situations change, gas prices might go so high, that you may want hybrid/electric/alternative,etc.

  • Like others have said above, even if Toyota has been known as a reliable brand in the past. There’s no guarantee they will be in the future, or even specifically if this highlander will. I’d be less worried about the engine/drivetrain reliability and more about the infotainment system reliability in the long run.

  • I don’t know what the details of that financing loan are (interest rate seems kinda high?), but $400/mo for a lease vs $700+ for financing is something to consider.

  • Go look up a 2009 Toyota Highlander and compare it with a 2019. Just keep in mind, you might see a similar level of difference at the end of your 10 year period. Some people don’t mind, others do.

  • Frankly, I would be a bit more conservative with your resale value estimation. 2009 highlanders were quite a bit more “analog” the current ones and because of that, there was little that could break past basic car functionality. I’m always worried about the long term reliability of current tech they put in cars and I’d be hesitant to believe they will all work after 10 years of use.

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Very true. It could also mean thrown rod, leaky transfer case, blown head gasket, etc…

Bottom line, no matter how good the reliability is, these cars are all machines with many movable parts. Eventually, they will fail…some sooner than others. It’s always a crapshoot.


To me, this always comes down to individual tolerance of risk. I have a Highlander XLE. It’s leased. For less than $400 (thanks Cody!) I leased it, because I am done with dealing with out of warranty repairs. I’ve owned several Toyota’s in 3 different countries. Most have barely needed anything other than an oil change but two cost $$$ in various out of warranty repairs. On balance, probably still better than BMW’s (definitely better than Audi) but the risk remains.

I just have no wish to return to owning a daily driver. I will absolutely own a fun weekend car at some point in the future that will be a total money pit, but for getting me to work, I need new, modern, comfortable, safe, reliable transport and I choose the easiest route to do so.


Let’s assume your numbers are correct and the difference is $1K/yr or around $83/mo. That’s the difference between driving new car vs old car. You have not added any major services which would be few thousand additional by 150K miles. 1 major repair would wipe out most of the difference and any additional repair would negate the rest.

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There is about a $10k difference in the above example, incurring $10k in repairs could happen, but not likely. But you and the others have brought up good points. Also, if parts wear out, then they are repairs, more so than maintenance. I still think that the current Highlander is not as crazy with high tech as other cars, but yes they may well be less reliable than the older ones have shown.
I guess perpetual car payments are the way it is.


I have a buddy who loved his 4Runner with 180K miles on it. Lots of broken parts in a short amount of time, including the catalytic converter. He finally got rid of it and bought a brand new TRD Pro 4Runner…


Exactly, The OP ignores the opportunity cost of tying up his money in a vehicle.

Instead you could invest that money and come out way ahead.

Or You could pay down that outrageous credit card interest payment with the money.

Whatever… that money sitting dead-weight in a new vehicle is worth more than you’d think


I don’t think you should ever finance/lease if you have credit card interest payment, lol.


Even if nothing breaks in ten years (which I suspect is not going to end up being true), the major services at 60k etc will cost something. A timing belt/chain and water pump will almost certainly fail in ten years, and as mentioned above, some electronic doodad will fail almost certainly. And also as mentioned above, a lot of people at year one say they’re keeping it nine more. Few seem to do it.


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Thats a big assumption that people always can invest better than just paying for the loan.
Especially during the life of a 84 months loan at this stage of economic cycle.


An 84-month note indicates to me that an individual isn’t investing :poop:, as they’re buying way more car than they can truly afford. That’s an insane length on a car. Almost all brands will be out of warranty in 7 years.


They can always be sold an extended warranty:)
But given stats that average new car price is over 36k and average payment is $500 gives about 80 months loan on average:)

But then a lot less people understand investing than even simple retail financing of a car.
2008 has plenty of headlines “I didn’t understand what I was signing”
Little has change - only the financial tool switched from mortgage to car loan. The rest of the circus remained the same.