#483 I need a new car! To lease or not to lease?

With my 15 years old VW Golf “braking down” at the beginning of the week, it is time for me to decide what to do next!

But wait a minute? What happened? Well, the story is not that special. My rear brakes are having an issue and are blocking the wheels to a certain extent when driving. Sure, just change them, right? Well, not really! The list of problems is long and expensive. Is it worth to invest that much money into an 15 years old car?

Actually, not really!

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Sure, I knew that the day would come! But I always thought that I would still have at least a year or two until I need to think about a new car. Well, but that seems to be the thing about life. You can plan whatever you want, life has other plans!

Buying a car right now? Well, not really the perfect time, isn’t it? I am finishing my master in engineering at the end of February, but have currently no job for the time after! I do not have a garage. There is the COVID19 thing that will make finding a job more challenging. And then of course, my expectations towards a car might be extremely high! I just know stuff about cars and now worry too much about things, others do not even consider.

Buying a + 40k car in this kind of a situation? Not really a good idea! I do not even know where I will life in 5 month! But what is the alternative? Buying a cheap car, like I did 8 years ago? Well, sure, sounds like a cheap alternative, but is this really true?

After going crazy with this current situation for the last 3 days. In which I was jumping up and down from one idea to the other, I finally gathered all my thoughts and started a less intuitive but rather systematic approach! Come on! I am an engineer! Let’s use some numbers and make this right!

We all might know at least some horror stories about the topic of buying or leasing a car. Having never ever even leased a car before, I can only talk about the buying part from my own experience.

Step 1: What are my current costs?

We all go through life with a sense for how much something might cost. I pay such and such for my phone, this for my insurance and that for the car! But when we really think about it. We hardly know the real numbers! We are just randomly guessing! Driving an old car, that must be cheap! Leasing a brand new car, this is bloody expensive! But is this really the truths?

And so I opened an excel file and started to calculate. Owning the VW Golf for the last 90 month and considering the costs for buying the car, its current value and the costs for repairs only, I paid 176,60€ a month while driving 10.666 km in average a year. That are just the costs for owning the car and the repairs. No insurance, no fuel, no nothing!

Sure, you might argue that maybe, I was just not particularly lucky with my old car. But well, who says that I will be more lucky with my next one? Of course we could also argue, that it’s a beginners car and you don’t want inexperienced people behind the wheel of expensive cars, but anyways. That’s just how it is! That’s my current standpoint.

Step 2: What are my options?

Without a garage, no clue about the location of my next job and stuff like this, there are only three options. Either I buy a relatively new car for around 20 k – to 30 k which will be nothing special, drive this for the next 15 years and lose a lot of money while driving an old car. OR, I buy a very cheap and old car, risking that the maintenance nightmare will continue. OR, just lease a car for the next two years and take another decision then, when my life should be settled in a much better way.

Step 3: Let the numbers decide!

What will I do? Well, I will just calculate the whole damn thing, considering two factors: “Costs” and “Life quality”.

Sounds too easy? Well, if you really want to do the calculation correctly, it’s a lot of work! You need to consider risks, try to get some data from other people and stuff like this. Will I make it so professional? Well, I am not so sure about this! But of course I will calculate the costs in such a way, that they will be realistic considering my past experience. Therefore, I will just visit a lot of different dealerships and get the numbers I need.

See you next time!

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