Checklist #11 · Major Purchases
Lease vs. Buy Car Decision
Compare the true financial implications, flexibility trade-offs, and long-term costs of leasing vs. buying a vehicle — before the dealership frames the decision for you.
22 action items~15 min to complete4 sections
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Understand What You're Comparing
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Understand that lease payments are for depreciation only — not ownershipKey
Calculate the total lease cost over the full termKey
Calculate total purchase cost over equivalent ownership period
Note that leasing always costs more per year than buying and holding long-termWatch out
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$556
Average monthly lease payment (2024) vs. $735 for purchase loan
+62%
Extra total cost of perpetual leasing vs. buying and holding 10 years
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When Leasing Makes Sense
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Confirm you drive fewer than 10,000–12,000 miles per yearWatch out
Confirm you treat vehicles well with no modification plans
Verify you want a new vehicle every 2–3 years
Confirm your business allows you to deduct lease paymentsKey
Understand there's no equity — you're 'renting' the vehicleWatch out
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When Buying Makes Sense
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Plan to keep the vehicle 5+ years after payoffKey
Drive more than 12,000–15,000 miles per year
Want to modify, customize, or use the vehicle commercially
Prioritize total cost over monthly payment
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Run the Comparison
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Calculate 5-year total lease cost (2 leases over 5 years)
Calculate 5-year total purchase cost (buy and hold)Key
Add insurance differential (leases often require higher coverage minimums)
Use the Worthune Car Decision Scenario to model your specific numbersAction
Make the decision based on total cost over your ownership horizon — not monthly paymentKey
Estimate Current Tax RateAction
Estimate Retirement Tax RateAction
Choose Roth if Rate LowerKey
Choose Traditional if Rate HigherKey
Split Contributions for Diversification
Account for State Income TaxAction
Consider Required Minimum DistributionsWatch out