I need an advisor
Yesterday Brad and I met with a financial advisor. I’ve always been pretty frugal with money, but I felt like I needed to make sure I was on the right track. I wanted to know if there was anything else I should be doing, financially, at this point in my life. Besides making a hell of a lot more money than I am right now.
The financial advisor was very nice, but he basically told us he couldn’t help us. Not because we’re a hopeless case but because we’re doing all we should be doing right now. Essentially. He helps his clients with six different areas, and at this point in our lives, we only need help with one of those. He said he’d be ripping us off if we “hired” him to help us. So basically he sat with us for just over an hour and told us to listen carefully because we were about to get a lot of free advice. We listened carefully and asked questions, and he said we could keep in touch if we had any more. And that was it.
While I’m glad he was honest enough not to rip us off, I have to admit I was a little disappointed. Honestly, what I want is for someone to walk me through everything. Hold my hand and tell me what to do. Don’t say “Maybe you want to open another savings account or perhaps a money market account,” but instead tell me “Go to your bank, open a money market account, put $100 a month in it.” Specific directions, that’s what I was hoping for.
One of the things that prompted me to talk to him was that I need to buy a new car. I’ve driven used cars for ten years, and if you’ve been reading for the last few months you know my current used car has been frequently rebelling. It’s time to get something reliable. Only first I need to find an extra few hundred dollars in my monthly “budget” to pay for it. When I mentioned this to the financial advisor, he asked if I had considered leasing.
Why no, I haven’t. Everyone I know buys and has always told me that’s the way to go. But so far what I’ve read about leasing and what I heard from this guy sounds pretty good to me. The mileage limitations kind of suck, but it’s not like I’m planning a cross-country road trip. And other than that, I can’t find any other catches. Obviously I’m missing something. Gotta be, right?
I’m not good at making these kinds of decisions alone. That’s why I need help. Not someone to make the decision for me, but lots of people to give me lots of input. Please, even if you don’t normally comment, I really need advice and suggestions. Horror stories of your leasing (or buying) experiences. This is not another desperate attempt to reveal my readership, I’m so over that right now. But part of the reason people blog is to connect with so many more people than you do in your ‘real’ life. That’s what I need now.
Please, help me figure out the age old question: buy or lease?
January 31st, 2007 at 9:10 pm
I wouldn’t lease a car. It’s the equivalent of renting a house (read: flushing money down the drain.) And the payments are pretty much the same if you buy, so why not buy? In the end, it’s your car, and if you buy one with good resale value, you should be fine. My two cents …
January 31st, 2007 at 9:10 pm
I’ve always bought my cars. Just because “That’s What You Do”. My brother, on the other hand, only leases. He loves it. My best friend did a couple of leases too and had no problems.
That’s all I’ve got for ya.
February 1st, 2007 at 1:19 am
I do believe I’ll be leasing when I do make a move to get a new vehicle.
I’ve never actually sat down and done any calculations to weigh cost/benefit with leasing vs. buying. It’s something I’ve been meaning to do for a couple of months now. Here are my views:
Buying a car will make more sense if you actually want to keep it for then next 10 years. Leasing a car makes sense if you want a new one every 3 years.
You dont’ need to think of it as throwing money away. If you buy a car, the value will eventually be $0 anyway. At that point, you’ve thrown all your money away too. Renting an apartment is to buying a house as leasign a car is to buying a car. The HUGE difference between renting an apartment and buying a house is that a house will go UP in value. Which is why it is wise to buy a house as soon as it is possible. A car goes down in value, so it’s not the same principle. You’re going to throw away about 80-90% of a car’s value when you own it. When you lease… you’re throwing away 100%, but it is slightly less expensive than buying the same car.
So… you’re screwed either way. I’m probably going to lease a car.
February 1st, 2007 at 9:04 am
Jason made a good point about the house going up in value while the car will only depreciate, a difference I think a lot of people overlook.
My only advice, either way, is to look into the insurance! When I was car shopping, I would email my insurance guy every couple of days with a few new car prospects and he’d respond with quotes. As an example, I thought a Neon would be a practical option because they’re SO inexpensive and fuel-efficient, but my insurance guy said they were among the most expensive to insure because the cars are so cheap that even in a small scale crash, they consider them totalled. Just something to think about.
February 1st, 2007 at 12:51 pm
like jason said, you can’t really compare leasing/buying a car to renting/buying a house. as soon as you drive the car off the lot, it depreciates whereas a house will likely go up (we moved into our house a month after purchasing it and it had already appreciated by 20 thousand).
i lease because i like the option of trading up every 3 or 4 years (depending on my circumstances) and i like the lower monthly payments and i really don’t care about owning my car especially if it turns out to me a lemon (which some have) ~ that said, i love my current car and am likely going to buy it out next year when my lease is up, the buy out after leasing is a really really good deal for me because (and this is the important part) not all lease agreements are created equal. if you decide to lease, check out the various options. i have a mazda and they have really good options (at least here in canada) and so part of my lease goes towards ownership (should i choose that option) or goes towards my next lease, thus bringing the price down a bit.
at the end of the day, its a personal preference. talk to the guys at various dealerships and find out all the options so you can make an informed decision based on your needs and current situation.
i wish i had been as concerned about money and budget issues when i was your age …
February 1st, 2007 at 1:08 pm
My aunt and uncle only lease, they have never owned a car. They are always driving really nnice cars too.
February 1st, 2007 at 5:52 pm
Ryan is at the end of his lease and is not planning on re-leasing. We went over in mileage (and we didn’t travel far…only a couple of times to Chicago) that we have to pay for. Then there is the suprise inspection and turn in fee. We are definately looking at newer used cars with low miles and remaining warranties. If you have not retained anything I have written thus far, retain this word: WARRANTY.
February 2nd, 2007 at 6:04 pm
Ohmygosh, I was so thinking of you on this matter. Those Financial Peace cd’s that I was telling you about… Well, I starting ripping them yesterday and IT deleted the files before I could burn them because they were taking up too much space apparently. Grrr! These cd’s might give you a specific idea as to whether or not you should get into more savings or whatever.
It also talks about buying vs leasing. I, personally, would never lease. It just means that I will continually be indebted to someone else forever…to me anyway. I will most likely never buy a brand new car again either.
I’ll try to copy, at least, that cd for you by Monday. It will, in the least, give you food for thought.
February 2nd, 2007 at 7:32 pm
Yeah…Bonny and Mark both lease cars and they have to drive Mark’s all the time so that Bonny doesn’t go over on her mileage. Mark’s car is technically a business car…so they can write off what he spends over on mileage. Plus…I hear if you continue to release through the same company, a lot of times they’ll wipe off all your miles over and not make you pay at the end. However..Bonny and Mark both pay way more in a car payment than I do..and I bought my car. They do have expensive taste though..:)