OK, now that I’m an adult — or, at least pretending to be one — I have to start making adult finance decisions. The inaugural post-marriage decision here seems to be: what car to get DJ L’il Bit.
So the background is this: we both have the same philosophy in cars, that is, buy a nice used car and drive it until it dies, sputtering, by the side of the road. This is why DJ L’il Bit has been driving around in her 1995 VW Golf and me in my 1996 Lexus for a few years now. The Golf had been clearly nearing the end of its life around the time we got married, and, in fact, died sputtering by the side of the road a couple of times. That got to be too much, so now we’re in the replacement car market.
Our first reflex was to buy another used car in reasonably good shape and drive it into the ground. DJ L’il Bit has long wanted a convertible, and, since we live in sunny SoCal, this seems a reasonable desire to fulfill. However, there’s a catch: based on our Life Plan, there’ll be kids on the way in something between 2-4 years. A cute 2-seat convertible won’t be too practical when we have to fit a baby seat. Plus, a 4-to-5-year-old cute convertible with 40,000 miles will be 7-9 years old with 100,000 miles when the baby comes around and we’re not sure we’d want to drive a new baby around in any car that old. So that probably means: new car ‘round baby time.
Then, if we sell the cute convertible 2-4 years + many thousands of miles, well, we’re not going to make a lot back, probably.
If we’re only keeping the car a few years, all of a sudden the ROI on a cash outlay to own the thing doesn’t seem very high. And that makes us think of something we’d never considered before: leasing. We’ve found a lease on a cute, brand new Mini convertible that seems to be about 3/4 the price of buying a used one with low mileage. We’d probably have to pay a penalty to get out of the lease early, but that still adds up to about the same as the cost of the used car, and that doesn’t even factor in the cost of the expected difference in reliability between the two cars.
Which brings me to my question: I know that, most of the time, the smartest thing to do financially is to buy a used car and run it into the ground. But, in this case, it seems smarter to take the lease. Or, am I missing something? I know the friends I have who read this are skilled in the math department and maybe even know a few things about the world. What am I missing here?