Posted in Car Buying, College & Student Loans, Debt Free, Financial Freedom, You and Your Money

To Buy or To Lease – That is the Question



This weekend I was having an intense conversation with my 19 year old daughter about all of the options for buying a car.  In her mind the only option is paying cash for a used car and at her age that is the best option.  No one in college or even a young adult starting a family should have a new car with an average car payment of $350.  One of the many things that I have realized over my 15 year career is that there are 2 important steps in making all financial decisions:  always do the math and do what will work for you personally and not anyone else.

Having said that keep in mind that debt doesn’t work for anyone.  Never buy anything that you do not have the money for.  This is why the only option, in my book, for a millennial is paying cash for a used car.  But as we get older, many of us build up our savings accounts and we end up having the money to comfortably drive a new car.  So how do we decide what to do between the two options that are available for getting a new car.  The Bible is an awesome book of instructions that God has given us, but no where in the Bible does it tell us to buy a car over leasing or vice versa.  However, it does tell us to be good stewards and great managers of what God has given us which is where the math comes in.

The math when it comes to buying vs. leasing has to be looked at long term.  For example, if you are planning on owning a car for 10 years, you need to total in the amount you pay for the car in addition to repair bills that will be paid over the course of that time.  About 3 years ago, my husband and I were in need of a different vehicle.  We had the financial ability to get a new car and so we began the numbers game.  The van we had that needed to be replaced had 420,000 miles on it and we had owned it for 9 years.  We paid $20,000 for it and had put in at least $5-6K in repairs including a new engine.  That means that over the time of owning the car, it had cost us $240 a month to have that vehicle.  So we decided to look at both of our options and decide if we wanted to buy or lease our new vehicle.

I want to be up front before I go any further.  Leasing is not for everyone and you should never lease just for the low payments.  It can be very attractive especially to people who live in a monthly payment, paycheck to paycheck world.  And just like deciding whether to rent or to buy a home, you need to do what is going to work for you in a positive way.  Leasing is not what it was 20 years ago and there are advantages to leasing, but you must do your research and be honest with yourself about your needs.

Here are a few things to consider when making the decision between buying and leasing:

  • When you buy a car, you own it but cars are not investments and they are only an asset to the extent of what they are worth minus what you owe.  Don’t pay more for a car just because you will “own” it.  Research the car you are looking at and know how well they hold their value.  For example, a Honda will be worth more 10 years from now than a Kia will.
  • When you lease a car, you have no maintenance and this can be a big deal to many people especially as we get older.  An average lease is for 36 months and that is the minimum warranty on most vehicles.  And tires and brakes usually last at least 40,000 miles so you would only be responsible for oil changes which many dealerships will throw in.
  • As you probably know, new cars lose value quickly in the first year or two.  Most leases come with GAP insurance included which will cover the difference should your car become totaled from an accident.  This is an additional purchase when buying (if you are financing) and should be included in the math.
  • When you buy a car, you can drive it as many miles as you want.  However, with a lease you are limited in how many miles you can drive per year (average is 12,000/year or 36,000 total).  When your lease ends, if you don’t purchase the vehicle you will be responsible for paying for the miles over at the rate of the lease agreement (usually .20/mile)

I am not one of those money people who says “never buy a new car” or “never lease a car”.  I have done the research and there are advantages to both.  You can have anything but not everything.  This means that in life we have to choose what is important to us and use our financial resources to do those things.  God loves giving us the desires of our hearts, but He will never help us get something that is going to hurt us.  You work hard for your money and God wants you to enjoy life.  A godly life has great balance.  That may mean that if you have a new car you can’t travel as much or have as big of a house as some.  It may mean that you don’t buy “stuff” everyday.  But if having a nice car is important to you, you will be willing to sacrifice in other areas in order to have what adds value to your life.

Let me close with this – new cars are not evil.  They are awesome and frankly can give you peace of mind when traveling the highways and byways.  But they can also cripple you and take you into bankruptcy if you buy them before you have the ability to pay for them.  Debt is not ok – God made that one pretty clear.  This is true for a used car or a new car.  Anytime you are looking at getting a new car, weigh all of your options, know your true financial situation and always do the math.  Do what is going to move you forward, not backwards.

Have a blessed week!  Lots of love!




Posted in Building Wealth, Car Buying, Debt Free, Financial Freedom, You and Your Money

The Day Before


I am so excited for this week!  My daughter is coming home from college and every moment spent with her is a blessing.  I consider myself one blessed lady.  Blessings that would take up hundreds of pages if I listed every one.  But I made a habit years ago of celebrating those blessings everyday of the year, not just the 4th Thursday of November.  This is one of the reasons I have no issue with listening to Christmas music now and singing at the top of my lungs.  Because I have made everyday Thanksgiving Day.

Thanksgiving for many is about Black Friday shopping and all of the deals you find – I do love a good deal and usually that is what my blog post is about this week.  For many it is about seeing family that you haven’t seen in a really long time.  And for some it means deer season is just a few days away.  All of those are great and all of those are fun, but I wanted to focus this week on helping you see the many blessings you may not know you have.  When asked “What are you most thankful for?”, most answers are the same – family, specific people, animals, and food.

But I want to take a journey with you to another part of your town, city, state where people actually have less than you.  Many of us talk about all the things we don’t have and all the things we can’t afford.  Many of us are stressing over finances right now because we have bought things without having the cash to back it up.  But I want you to please read the list below of just a few of the things I am thankful for everyday because I know that there are people on my street, in my town, and in my area who don’t have what I am blessed to have.

  • Food – there are children everyday whose only meal is at school.
  • Clothes – there are women with just one pair of shoes and they have holes in them.
  • Water – there are people who do not have running water right here in the U.S.
  • Toilet – there are people who have to use outhouses and buckets even in 2016
  • Heat – I remember when my grandmother would heat the living room only and when we went to bed, we used an electric blanket.  The whole house was never heated.  My husband deals with clients everyday who choose to use their ovens for heat because they do not have any.
  • Jackets – many kids go to school with just the shirt on their back, many times a t-shirt in the middle of winter.
  • Transportation – a pet peeve of mine is when people say they need a car to justify a huge car payment they can’t make.  There are many people who would love just an old used car to get somewhere without having to walk.
  • Bible – I have many Bibles all around my house including on my iPad and phone.  There are people who would love to have just one.
  • Electronics – we all say that we “need” computers, internet, phones, TV’s, tablets, etc.  These are actually the last things we need.
  • Washer/dryer – I am washing clothes right now in my heated house – doing 4 loads.  Do you remember the scene in “The Blind Side” where Mike would go to a laundromat at night, hand wash his “other” shirt, slip it into someone else’s dryer and then spend the night there?  That is not fiction.
  • Income – you may not like your job (and I hope you will pursue your passion), but be grateful you have some source of income.  Many people, more than we realize, are one check or emergency away from having nothing.

The biggest thing I realized years ago was that even at my bottom – in debt with 5 zeros and making $10,000/year, I still had way more than other people.  I want to ask you today – don’t ever say you are broke.  Don’t ever say you aren’t blessed.  Don’t just be thankful for family and people.  Take a look around, focus on things you never saw as blessings, and start being thankful for everything.  There are treasures in every trial.  There is something to be thankful for in every situation.  2 1/2 years ago, my dad had a massive heart attack and basically left us – until God stepped in and saved his life.  Not for one moment did I focus on the heart attack and what could have happened.  Until this day, I focus on every blessing that came out of that and make sure I tell God and my daddy everyday that I love them to the moon and back.  I don’t know why daddy had to go through that, but I know that for me, only good will come from it.

You are blessed.  You have someone who loves you – God and me.  You are an awesome person!  I hope you have a blessed Thanksgiving and from my family to yours – thanks for everything!  We love you!!!


Posted in Car Buying, Debt Free, Saving for Your Future, Winning with Your Money, You and Your Money

4 Positives When It Comes to Leasing a Car


Cars are one of the hardest subjects for me to give advice on.  Cars themselves are a necessity 90% of the time, but the type of car and how you purchase it is all personal to your situation.  Usually I write about how to buy a car with the least amount of damage to your finances, but today I want to write about leasing a car.  Many people, including myself at times, think that leasing is just throwing your money away.  And on the surface it seems that way.  But today I want to share a story of a client of mine, Mary, for whom leasing was the perfect option.

First of all, like anything else you buy, it is about the math.  You can’t just look at the monthly payment or the total cost.  You have to look at both and more.  Whether you pay cash or finance a car (which I don’t recommend if you don’t have the money to back it up), you will have a car expense every month; either in the form of what you stash away or what you pay.  The monthly cost of owning a car is there in some form or other, just like car insurance.

Mary needed a car because her old car had 230,000 miles on it and was getting to the point where some major expenses could occur (engine, transmission, etc.).  Mary owned the car free and clear.  Also, 4-6 times a year, Mary was renting a car to go on vacation or to visit family because her car wasn’t reliable enough to go long distances.  This cost her about $200 each time.  After running all of the numbers (which we will visit in a moment), leasing was the best option for Mary.

Here is why:

  1. Cost – she was able to get a brand new, reliable car for $3000 down and $135 a month (2015 Honda Civic).  This is an amount that she had cash to cover; therefore, it wasn’t debt.
  2. Warranty – the car came with a full warranty covering everything for the term of the lease (36 months).  Therefore, she will not have any repair bills.
  3. Gap Ins – Gap insurance, which covers the difference if your new car is totaled or stolen, was included in the payment.  Adding this to your insurance policy if you buy a new car would be an added expense above the payment.
  4. New Car – she will get to drive a new car every 3 years if she stays on track with this plan.  If you are paying for a car every month anyway, in one form or another, why not drive a new one?

The bad parts of a lease are 2 fold – you never own the car and you have to stay within the mileage or you will owe additional money.  Now this worked for my client in this particular situation.

There were 3 options for Mary:

  • To lease the car, which down payment included, cost her $214/month to drive the car.
  • To buy the car, which with the same down payment, would cost her $379/month plus any repairs needed after the warranty expires.
  • To pay cash for the car, which would cost her $316/month plus repairs.

I want to make one point very clear about car buying or any other purchase you make – never promise money you do not have.  This is called debt and will stymie you every time.  The point of this post today and of Mary’s story is that when buying anything, but especially something as big as a car, do what works for you.  Run the numbers, count the cost, and make the best decision you can.  Mary paid cash, $8000, for the car with 233,000 miles on it.  She had it 7 years.  This means it cost her $100/month plus repairs plus rentals to own that car.  Now she can drive a new car, no worries, for less.  She is not in debt because she has the cash on hand to pay out the lease if something happens like a job loss.  In 3 years, she will look at the numbers again and for her, a lease will probably be the way to go.  But who knows what the future brings.  Do what works for you today and make the best, wisest decisions you can for you.  Personal finance is just that – personal.