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A reader's girlfriend says he should buy instead of lease.

2 minute read

Question: The Mercedes C-Class is a hot-looking car, and I can get a lease for 36 months at $399 with $4,193 down. My girlfriend (who might be my fiance one day) says that’s a big waste of money.

But here’s the thing: A 2017 C-Class goes for almost $40K. I’m getting one for three years at around $18,500. So I’m looking at what I save, while she’s only looking at what I’m spending. Who’s right?

— Aiden in Florida

Howard Dvorkin CPA answers…

When personal finance experts like myself gather, we agree this is one of the most common questions we’re asked. Buying a car versus leasing one has been a hot topic these past few years, because leasing skyrocketed.

In 2016, 31.9 percent of all new vehicle sales were leases — almost a third, which still amazes me. However, the pace is off this year, according to the car experts over at Edmunds. They say leasing has dipped to 31.1 percent.

“Leasing remains a popular choice among car shoppers, but the era of steady growth is over,” says Edmunds executive Jessica Caldwell. “This year we’re seeing a drop-off in trade-ins going toward leases, signaling that the pool of people opting to lease is shrinking.”

I think this is a good trend, because leasing only makes financial sense in a very few situations. It doesn’t in yours, Aiden.

I followed up with you after receiving your email and learned you need the car to drive to work, which is a 40-mile round trip. That means you’ll drive 10,000 miles a year just for your job (figuring 50 weeks a year).

The lease you’re considering penalizes you for more than 12,000 miles a year. Are you really certain you’ll only drive 2,000 miles a year that aren’t for your commute? That’s a mere 5.5 miles a day.

Also, you tell me you like to take your two wild-and-crazy Great Danes on road trips. Why does that matter? Because in your lease is a clause that says you’ll return the car in “original condition, less normal wear and tear.” You admit your dogs like to chew on upholstery. You’ll pay a pretty penny for that.

Finally, you admit you really want this car not for financial reasons, but because you’ve simply “fallen in love with it.” I’m no expert in love, but I as a CPA for more than two decades I know this: Love can be expensive, especially when it’s unrequited. No car will return your love.

Bottom line, Aiden: You’re not an idiot. You’re a human being. It’s natural to be lured by a hot set of wheels. However, if you love your girlfriend more than you love a car, listen to her in this case.

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About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

I’m a certified public accountant who has authored two books on getting out of debt, Credit Hell and Power Up, and I am one of the personal finance experts for Debt.com. I have focused my professional endeavors in the consumer finance, technology, media and real estate industries creating not only Debt.com, but also Financial Apps and Start Fresh Today, among others. My personal finance advice has been included in countless articles, and has appeared in the New York Times, the Washington Post, Forbes and Entrepreneur as well as virtually every national and local newspaper in the country. Everyone should have a reason for living that’s bigger than themselves, and besides my family, mine is this: Teaching Americans how to live happily within their means. To me, money is not the root of all evil. Poor money management is. Money cannot buy happiness, but going into debt always buys misery. That’s why I launched Debt.com. I’m glad you’re here.

Published by Debt.com, LLC