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ACCOUNTANT EXPLAINS Should You Buy, Finance or Lease a New Car

Gabrielle Talks Money 37



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If you are in the market for a car – you probably asked yourself whether buying vs. leasing is the best option. Or more importantly, what is the best option where you can really get the biggest bang for your buck? In this video, we are going to go over the three main ways to purchase a car, the cheapest option, and as well as important considerations you should know. So, let’s get right into it!

00:00 Intro
00:33 Main Options
01:32 Cheapest Option (Calculations)
11:09 Other Considerations
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Gabrielle is a CPA and Tax Expert, as well as the founder of Balance + Wealth CPA, a licensed CPA firm that specializes in Tax. Prior to starting her business, worked as a Tax Manager at one of the Big 4 Accounting Firms for 7+ years, working with Fortune 500 companies. Gabrielle posts weekly videos on personal finance, business finance, and tax tips.
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Disclaimer: Note this video is not financial nor accounting/tax advice and should be used for entertainment purposes only. Consult with your own financial advisor, accountant and/or tax advisor for specific advice related to your business situation and needs.

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37 comments
@redmed10

Fingers to the chin. Classic pose.

@knowthyself690

Thank you for this analysis it was helpful. Soo, something few go over is what if you do not buy a New Car and keep until the wheels fall off. Please can you do.

My quick thoughts are this: When I buy my quality car, via finance with low interest rate. after 60 months, I will drive for another 48 months. During those four years, I will save the cost of the car. $700 x 48 months = $33,600 not paid to keep up with Mr. and Ms. Jones.

Skip a debt cycle and get ahead. Car prices go up every cycle, so the person that got into a Lexus 36 months ago with a lease of $600, is now in the new model for $730, and so on.

@BBoYSHaDoE

I don't understand how opportunity cost would be the same as interest. By buying the car outright, you pay no interest and the total cost of the car is lower than financing it.

@ML-tm1wn

Another factor to consider is that driving a already paid off car has a lot more fun. I would only finance if there's incentive like lower interest rate from manufacturer.

@kenfrank2730

I can finance or pay cash for a new car. If I pay cash I have to take the money out of a Vanguard investment. That means less money to grow. I could finance but I've been offered around 3.9 to 5.5 percent interest. And I have excellent credit. Much to think about.

@thaivo5281

We bought our Lexus in June.. by mid July we took it in for a 5K (miles) service 😂😂 lol no way we can lease

@visionaryrealm9282

Buy cash…financing is money u throwing in trash. Not to mention car repairs while still paying for ur car every month. Foolishness

@ARLCH1

A little bit late, but in scenario 2 you are missing the opportunity cost of the $5,000 down payment in finance and lease options. That would add $155 to the finance and break the tie between cash and finance. Putting money down saves interest but generates opportunity cost. Thank you for the video 🙂