Suze Orman: Don't ever lease a car


Assumptions that are not quantifiable/are probably wrong?

Example of his assumption being non-applicable. I have a paid off old Civic that has lived a hard life - low mileage but lived on streets up and down east coast. In my head I’ve written it off, it has almost no value due to hundreds of dings, scratches and a few big dents. For past 18 months I have said I’m not doing more than routine maintenance, if it breakdown it is done. And amazingly it keeps trucking (most cars work well if you maintain them properly from day one). Instead of spending 300 a month for 18 months - $5,400- I have spent about 500 bucks on my car. Plus saved probably $750 on insurance.

I don’t know what assumptions have me better off selling the car 18 months ago.


And think of all the money the Civic saves you by making sure you can never go on a date and have to pay for her meal too …


I’ve adopted the lease new/buy used approach for my fleet. For new vehicles, I enjoy having the knowledge of a fixed depreciation amount (or at least a floor to the depreciation), which is where the lease is handy. If I want to buy one, I prefer someone else to take the depreciation hit, let me find one with a decent maintenance history and I will perform most of the service/repairs myself. My only complaint to this approach is used trucks and SUVs are demanding a premium and I have some discomfort spending >$10k on something 10 yes old with >200k miles.


I completely understand this methodology and it gets even worse when they start playing travel sports. The time stuck will continue until they are able to drive themselves, then it levels off so you have time to restore that mid life crisis car.


Haha, yeah if I was single that car would be looooing gone. Main family car is an MDX. At this point the Civic is mostly used for my commutes when I have to drop dog off at daycare.


Used-Car Sales Boom as New Cars Get Too Pricey for Many

Price gap between new and preowned cars has widened to a near decade high

Auto retailers sold 10.4 million used cars in the second quarter this year.

Auto retailers sold 10.4 million used cars in the second quarter this year. PHOTO: LUKE SHARRETT/BLOOMBERG NEWS



Adrienne Roberts

Updated Sept. 23, 2018 7:04 p.m. ET

Rising new-car prices are pushing more buyers to the used-car lot, where they are finding a growing selection of low-mileage vehicles that are only a few years old.

Demand for used cars was unusually strong this summer and will remain at elevated levels through the year’s end as higher interest rates and rising prices on new cars continue to stretch buyers’ wallets, industry analysts say.

While used-car values have also increased in recent years, the gap between the price of a new and preowned car has also widened and is now at one of its largest points in more than a decade, according to car-shopping website, making deals on the used car lot look like more of a bargain.

New-car prices have steadily climbed in the years following the recession as companies packed vehicles with more expensive technology and buyers shifted away from lower-priced cars to bigger and more expensive sport-utility vehicles and trucks. The average price paid for a car hit an all-time high of $36,848 in December of 2017 and remains at near-record levels, according to

Second-hand ShiftUsed vehicles are becoming more attractiveas new vehicle prices continue to rise.Average transaction priceSource:

New vehicles1-3 years old2013’14’15’16’17’1805,00010,00015,00020,00025,00030,00035,000$40,000

“Customers forget a new car is now more than $30,000 and they expect it to be $20,000,” said Brian Allan, a senior director at Galpin Motors Inc., a Southern California dealership chain.

“When people see the price has gone up, it is sticker shock, especially when people only buy a car every five to six years,” Mr. Allan said.

At the same time, the used-car market is being flooded with leased cars being returned to dealerships, increasing the supply and options for buyers looking for two- and three-year-old vehicles that are generally well maintained.

And unlike in recent years, where the selection on the used-car lot has tilted toward slow-selling sedans, dealers are offering more of the crossover and sport-utility vehicle models that are in hot demand now.

The customer who would never consider buying used before is now driving off the lot in a preowned vehicle, Mr. Allan said.

With nearly 40 million in sales last year, the used-car market is more than double the size of the new-car business. The shift in demand is a troubling sign for auto makers, which will be under pressure to deepen discounts to keep customers from defecting to used-car market.

As new car prices have climbed, auto lenders have kept monthly payments low by extending loan-repayment terms to five and six years and introducing 0% financing on loans that made buying new a more attractive deal.

But as interest rates rise and credit tightens, auto companies are pulling back on such sales incentives. The average monthly payment on a new car was $536 in August, up from $507 last year and $463 five years ago, according to

Justin Scholz, a 35-year-old banker, was stunned by the new-car sticker prices when he went shopping this spring for a new SUV for his growing family. He had been eyeing the Lexus RX hybrid but felt the $66,000 price tag was unusually high. He looked for 0% finance deals and yet couldn’t find many out there.

“In the past, I entertained new because you could get a 0% interest rate for 60 months,” he said. “New was a small premium compared to used. Now, the gap is much bigger.”

Rather than splurge, Mr. Scholz decided to try his luck in the used-car market, where he found a two-year-old version of the same vehicle that had recently been returned after a lease. It had fewer than 30,000 miles and was more than $20,000 cheaper than the new vehicle.

Mr. Scholz bought the vehicle in April for $44,000 and has no plans to return to the new-car market anytime soon.


The dog told me to tell you this car is killing his social life at doggie daycare :slight_smile: The poodle in the Mercedes doesn’t want to to talk to him …


Hey, don’t knock the Civic…someone in another thread plunked 40 large down on a Civic Type R

Think about that…40,000 George Washingtons for a Honda Civic.


I’ve got a friend who was a busy student on a tight budget and needed a new vehicle. With my help, ended up leasing a 2016 Jetta SE for $212 a month with no money down, not even taxes and fees. 15,000k/3yr lease. Plenty of miles, warranty, reliable car, modern safety features, 40mpg, low payment. I highly doubt he would have been able to purchase a used car for that payment and not had to deal with unexpected reliability issues, excess maintenance etc. It was a perfect situation for him. He just turned it in and never put a penny into that vehicle other than the lease payment. There are more considerations when choosing your mode of transportation than just “what is cheapest?”.

I can never get over people acting like leasing is bad because you’ll never “own the car”. Who really wants to own a car? Why would I want to throw tens of thousands of dollars at some depreciating asset? (Full disclosure, I own a car a now. Granted it was 8 months used and 30% less than it’s new MSRP because a new model had come out.)

The other thing I can never get over is people who brag about saving and paying cash for their cars. Ok, so you’re saving money in some low yield savings account. Then you take all that money and immediately throw it into an ‘investment’ with a negative return. You could have just been investing that money at a return and taken a low interest rate loan (interest rates are climbing so this equation is changing now). Yeah you’re super smart with money… :wink: Suze Orman is just good at duping dummies with dubious financial advice.


So (A) this is predicated on a model that depreciates a lot. And

(B) were kinda being given away at one point in time. The lease deals were really good (simply relative to MSRP; arguments over the quality of the car will remain separate).

So (A) if you looked at the bread and butter of the market or just chose more judiciously, the math might look very different. Honda Accord, CRV or Pilot, Toyota Camry, RAV4 or Highlander, most Subaru’s etc.

Most of the these brands have relatively cheap OEM extended warranties to 7 or 8 years. If the car were a lemon (low probability) you’d know and suffer within the first 3 years. So leasing offers no advantage there, and the extended warranty can take away the post-warranty money-pit scenario.

The other assumptions are questionable too. Why would consumables like brakes and wipers need to cost $500-$1,000 per year? Brake pads are cheap, labor isn’t extravagant either. And they don’t need to be changed every year. Rotors are even less frequent. Wipers are $20 and DIY.

Why would the 10k service intervals be $1,000 a pop? Just to use something more expensive than a Honda, a BMW 535i is $79 per year for oil changes and $180 every 3rd year for brake fluid flush. Brake pads on all four corners were sub $500 including labor at 50k miles.

So do the math on 8 years of Toyota or Honda ownership vs 2.66667 leases and the math will look very different


In addition to what @max_g says above, why would you “Need” to drive a 40k vehicle just because you need AWD? You can buy a base model AWD car for half that. Remember, all those pretty options you want are considered “wants” not “needs.” You don’t “need” to have Carplay, power roof, massaging seats, 13 passenger volume, etc.


Many of Suze’s audience are people swimming in debt with their heads just barely above water. For those people (the target audience) Suze’s advice is sound. For those people driving a 10 year old Corolla is actually a better suggestion.


If you are into such women who decide BFs or husbands on the basis of car brand you are doing it wrong, even with merc and bimmer they wont stay loyal to you.


How about Porsche? Or need something higher?


Fake news!


Money dont buy loyalty else rich dont indulge in affairs.


And the unstated assumption is that these deals will continue forever.

On a micro level just look at Volvo. Of the models that came out after that S60, how many lease well? Any of the XC 40, 60, 90, etc? V90 or CC? S90 leased well briefly but unless you had the right pull ahead timing, you would have missed that boat.

On a macro level, leases are based on factors that vary to some extent with the broader economy. MF…can’t stay low forever in a rising rate environment. RV…can’t stay high forever. Used car values are great now due to a booming economy, record levels of employment and stock market wealth, lots of home equity for anyone who bought in the last ten years or before the previous boom, low rates and easy credit, etc.

If anyone thinks these things last forever I have many things to sell them.


Until this year, the average age of all of our 3 cars (all my cars in my lifetime) was 20+ years. But then, the latest 2 cars failed long-term (6+ weeks) and we needed a 6-month ‘bridge’ car until the Tesla Model 3 was released. Also, we wanted the bridge car to be a plug-in hybrid. Yeah we could have hunted around for a used plug-in hybrid and purchased it, tying up a lot of capital that could be put towards the Model 3 purchase. Not everybody is in the financial situation that Suze Orman imagines.


With that said, nobody “needs” a 50k Tesla either when a 20k Civic will do the trick. That’s the point everyone is missing. When a car is intended to be basic transportation, from a purely economic standpoint, nobody “needs” anything but 4 tires and a steering wheel.

And before anyone chimes in with “I’ll save money on maintenance and gas with the Tesla…” the average driver is not going to recoup the 30k premium on a Tesla in a car’s useful intended lifetime, especially when insurance is more expensive on the Tesla too. If you want BEV or PHEV, a Leaf will do the same basic thing a Tesla will do…drive on electric…and cost thousands less.

That’s the point many are missing on this thread when insinuating a lease is more economical than purchase. Nobody needs a loaded up Escalade as a daily driver when a basic sedan will do. Many of us here had no clue what an SUV was growing up, and somehow, our parents/grandparents/friends all managed to survive and get from A-B. I remember when power windows, Cassette deck and a rear window defogger was considered fancy, and people are crying they “absolutely must have CarPlay” in their next car today…lmao. A 250/mo x3 deal you got today isn’t guaranteed tomorrow. Americans think flashy is more important than practicality, don’t save money, and think bigger is better, but will complain when their credit card is maxed out and they can’t afford to repair the furnace that just died.

With all that said, I lease because I can afford it, get bored after 3 years and like the peace of mind a new car warranty provides me and my family. I don’t kid myself thinking I’m saving money in the next 20 years driving 7 new cars with a constant low monthly payment vs 2 financed cars over that same timeframe.


this is why I lease, I purchased a 2 year old car once, yeah for 2 years things were fine, I financed it for 5 years…so after 2.5 years, car was 4.5 years old, I needed new brakes & rotors, that was close to $1000.00, plus I am still making payments, My daughter has camry, she just paid $500 for back brakes, I would just rather lease, no maintainance issues, Toyota covers everything for 2 years…I see no reason to buy…for this time in my life, I live very close to my job, I only put about 8,000 miles a year on my leased