My lease is up in December and I'm considering buying out the lease at that time. I need help figuring out if it's a good deal. I think I've taken most of the facts into account, but help me see if I'm missing anything.

I have a 2010 Toyota Camry LE 4 cyl automatic with 21,900 miles. The car is in very condition and has had no problems.

Lease Details:

Down $2,000
Payments $192/m for 36 months = $6,912.00
Buyout = $14,325.00

Value Details:

Edmunds lists values of: Trade - $ 14,251; Private Party - $15,938; Dealer - $17,317

Kelley lists values of: Trade - $15,165; Private Party - $16,815; Dealer - $19,215; and Certified Pre-Owned - $19,655

Financing Details:

I'd put $3K down on the financing. I'm assuming I can get a 1.99% interest financing at Pentagon Federal for either 26 or 48 months. Factoring in the sales tax of 6.5%, the total paid would be $12,636 for 36 months or $12,768 for 48 months.

I worked out complete totals for the total leasing plus financing costs, but I'm not sure if that's needed to figure out if the buyout is a good deal. I think it's more a matter of comparing the buyout price to the values. I'm thinking the buyout is a good price based on the values. Am I missing anything that I should be looking at?

If I don't buyout the lease, I will either buy another vehicle either new or newer than my camry or lease again to keep a lower payment.

I'm not a car expert, but it sounds like a pretty good deal to me. I bought a 2010 Accord last fall and also looked at Camry prices, and definitely didn't see anything that new/low miles in the $14k range.

I'm not a car expert either but I'd say do the buyout since you already have money invested in the car.

Considering that you have limited your choices to those that involve buying a car you don't have the money for... yep, looks like buying this particular car would be a pretty good deal. And then you won't have to clean your junk outta the trunk nor argue with the dealer over how many scratches it has.

Thanks for the insightful post. I asked for advice or suggestions, not to be mocked. I am trying to correct past bad choices and make better choices in the future. Not that I'd say my car choice has been horribly bad.

Except those costs are "sunk costs" and thus shouldn't really be part of the calculation. This is especially true with a lease where you don't even have equity in the car when you are done.

The way I'd look at it is this:
If you were in the market for a used car, and saw that car with that purchase price (the buyout amount) would you buy it? Given the buyout price is competitive with *trade-in* values (much less private party or dealer values), it looks like a great deal to me as long as you actually want the car and plan to hang on to it for a while.



He has a point, though. You've already established that if you don't buy out the lease, your plan is to either get into another lease or buy a newer car, neither of which is the best way to keep one's car costs low. If you had mentioned buying a used car in a similar price range as an alternative, the response may have been different.

The biggest savings on a vehicle come in the years *after* you've paid it off where you keep driving it for several years and funnel the money that used to go into car payments into savings (both to cover any future repairs/maintenance and to pay for a replacement car years down the line when the car ages enough that it becomes either financially impractical or unreliable).

I know he has a point. I agree with everything you said about car ownership. I just assumed that it was obvious that I was trying to get myself out of the constant cycle of car turnover and that this next decision is my first step in doing so. What I disliked about what he said was the tone, or at least what I perceived the tone to be, of my potential choices. Like I'd already shot myself in the foot and there was no way to course correct.

Moving on, I do think the camry is a good value for the buyout, assuming that the value doesn't significantly drop before December. So I'll likely be buying out the lease at that time, unless I can get Toyota to allow me to buy it out now for the same price.

My point exactly.


Considering another car fleece isn't getting off the car ownership treadmill. I would suggest buying a 10 year old used car for cash but I suspect that would fall on deaf ears, wouldn't it?


You asked for input so don't get mad if you don't like the answer. You only have yourself to blame for even being in this situation to begin with.

Considering another car fleece isn't getting off the car ownership treadmill. I would suggest buying a 10 year old used car for cash but I suspect that would fall on deaf ears, wouldn't it?

Not necessarily. I see the value in doing so. The problem is that I have to convince my husband that owning any car is a good idea. He thinks that leasing is the answer. He leases his current car and plans to lease again. He doesn't want to see me driving around in a car that may or may not be reliable. Choosing to own my camry and keeping it for the long haul is the path of least resistance in our marriage if I want to own a car outright. Unfortunately, I cannot just make this decision without appeasing him as well.

Personally if it is your car, unless it is an car that affects your joint finances, I don't see why it is his business what car you are driving. Is it because he is concerned for your safety (thinks all used cars are inherently unreliable) or more likely it makes him look less financially responsible (because he intends to keep leasing new cars which is the most expensive way to be in a car).

Maybe he needs to re think his assumptions.
here are some links from Clark Howard about buying versus leasing.

http://www.clarkhoward.com/categories/cars/leasing/

Ahhh...I see. Convincing someone else (especially family) that one financial decision is better than another is rarely easy, even with mathematical proof. :-/

Leases do have some advantages (most notably that of allowing you to drive a more expensive car than you could normally, since the payments are lower than for a purchase or similarly driving a car you could afford to buy, but with a lower monthly payment), but unfortunately those advantages only apply to someone who plans to stay in a newish car rather than hang onto one for a while. In other words, if your plan involves always having a car payment regardless, then leases can make sense since they can lower that payment.

I do see the appeal of staying in a newer car for the reliability aspect, but cars like the Camry tend to remain very reliable for a *very* long time, as long as you keep them maintained. Once you get to the point where you no longer trust the car quite as much, that's when you take the money you've saved up from not having a car payment and buy something that you do trust to be reliable. I've honestly had thoughts about buying a new car myself recently, but then I always seem to come back to the fact that my current car (a 2006 Subaru) is paid-off, very reliable, and suits my needs, so there really wouldn't be any point to changing.

Wait a minute. You said he is a scientist. If so then he should put his preconceived ideas aside listen to what the data tells him. And...you're a lawyer. Persuasiveness is your profession!

Seriously though, I've hesitated to step into this because buying the Camry is probably a good solution for you. You probably will not find a better deal. Your 2010 Camry will still be running in 2020. A 10 year old car you buy now might not be. Hard to know...but at least with the Camry you are comfortable with it.

Leasing cars rarely makes sense unless it is a business expense. I'd hope your husband has sense enough to research that and listen to you.

He is concerned for my safety. If either of us had an unreliable car, I know he would rather drive it and let me drive the more reliable car.

I wish I could say that's why we started leasing. We actually started leasing because we needed to reduce our monthly expenses during a bad time. We were paying near $800/m for two cars and traded them in for leases. Both of leases are under $200/m and neither vehicle is anything fancy. The camry, while reliable and a good car, has no bells or whistles at all. Which I'm fine with. And his car is a Scion Xb, which doesn't have any special perks at all and is not customized.

He's an underwritier in insurance. I'm not sure where scientist came from. You're right, I should be able to persuad him as an attorney. My powers of persuasion only go so far. I don't think I could convince him that it makes sense for me to turn in a 2010 and buy a 2002 model of a car. Even showing him the numbers, he'd still be against it. My best bet is to keep the camry until it is that old. That wouldn't be so abrupt for him.