A lot of parents help their kids with a car purchase, and so some of them are floating the idea of leasing a brand new car instead of buying a used one. While this might sound like an inexpensive way to get the newest and safest car, it isn’t the best solution for a new driver.
I’ve given car buying advice to many parents on how to select and shop for a quality vehicle for their kid. Usually, my advice goes like this: research cars that are known to be reliable, make sure you get it inspected by a trusted mechanic, and stick with private sellers over dealerships because you will often get a little more for your money.
But over the past year or so, I’ve encountered several parents that have gotten frustrated with the used car buying process. Often they lack the time, patience, and/or knowledge to successfully buy a quality used car. These folks will sometimes get tempted by super cheap lease deals and think that a sub-$200 car payment doesn’t seem so bad compared to shelling out a few grand in cash, or higher payments, for something that will probably have a bit of miles on it and most likely be out of warranty.
But leasing a car for a new driver could be more of a risk and won’t save you money in the long run.
First, let’s examine the numbers. You could lease something like a brand new Chevy Cruze for $190 a month with $2,000 out of pocket (not including tax and fees) for 39 months, and that means your total cost would be about $9,400 over the course of the lease. That doesn’t seem like a lot of money to spend for a car with an MSRP of around $22,000. But what people often forget about leases is that at the end of the term, you have to give the car back and start all over again.
So if you leased a car for a 17-year-old, by the…
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