Suze Orman’s Car Leasing Advice: Why Buying Might Be Better

Usman MRK September 15, 2024 0

Suze Orman’s Car Leasing Advice: Why Buying Might Be Better

When considering a vehicle, the question often arises: should you lease or buy? Recently, CNN host Chris Wallace revealed that he leases a car, sparking a conversation with financial expert Suze Orman. Orman, known for her strong opinions on personal finance, didn’t hesitate to share her thoughts on the matter. In this article, we delve into the key points Orman raised and provide a deeper understanding of why buying a car might be a better long-term investment.

The Difference Between Leasing and Buying

Before analyzing Orman’s advice, it’s important to understand the basic differences between leasing and buying a car. Leasing allows you to drive a new vehicle for a specified period, typically two to four years, while paying monthly installments. At the end of the lease, you return the car unless you decide to purchase it. Buying a car, on the other hand, involves either paying in full or financing through a loan, with ownership transferring to you once payments are complete.

Leasing Pros:

Lower monthly payments.
Ability to drive new cars more frequently.
Minimal maintenance costs due to warranty coverage.

Leasing Cons:

No ownership at the end of the lease.
Mileage restrictions and potential fees for wear and tear.
Long-term cost can be higher than purchasing.

Buying Pros:

Full ownership after the loan is paid off.
No mileage restrictions.
Potential to resell or trade-in for equity.

Buying Cons:

Higher monthly payments compared to leasing.
Maintenance costs increase as the car ages.
Depreciation reduces the car’s value over time.

Suze Orman’s Take on Leasing vs. Buying

During the CNN interview, Suze Orman expressed her clear preference for buying over leasing. She argued that leasing a car is essentially “renting,” which leads to an ongoing expense without any long-term financial benefit. Orman is a strong advocate for financial independence and emphasizes the importance of owning assets rather than borrowing or leasing.