Here's an email I recently received from a reader:
I moved from NYC to the midwest a few years ago and in my time back, I have leased cars. At that time, it seemed like a better deal as I was not sure what I wanted after not having driven for a few years and I was looking for all wheel drive sedans - I am not comfortable driving in the snow. However AWD sedans tended to be luxury cars so cheaper to lease than buy.
My current Audi lease is set to expire in a few months and I know I should buy my next car. That would be the frugal thing to do and I will have at least $30K saved up for that. I am just wondering if that is really the best choice. I am a single woman and I like having my car under bumper to bumper warranty so I don't have to deal with car issues. Most people suggest buying pre-owned which may not be covered. I also come from a family that has leased cars so it would be a huge mindset change to suddenly own a car I would have to keep for longer than 4 years in order to make purchasing a better deal than leasing.
I have a 12 month emergency fund and extra, max my IRA to the company match and also own a house so if I don't buy a car, the money saved would just go to lease payments. I am sure this seems clear cut but please let me know if the buy/lease dichotomy is as straightforward as most people seem to think.
Any advice for her?