Which is the Best of the Three?
by Dave Ramsey

I’m 61 and on disability. My home is paid for, and I have about a million dollars in assets. I try to spend no more than four percent of the principal each year. My current car needs repairs, but the cost would be more than the car is worth. I’m looking at getting another vehicle and was wondering, in my situation, if it would be better to lease, finance or pay cash.

Dear Dave,

I’m 61 and on disability. My home is paid for, and I have about a million dollars in assets. I try to spend no more than four percent of the principal each year. My current car needs repairs, but the cost would be more than the car is worth. I’m looking at getting another vehicle and was wondering, in my situation, if it would be better to lease, finance or pay cash.

Linda

Dear Linda,

I’m proud of the way you’ve handled your money. You’ve got the right attitude about wealth building, but the wrong idea about car buying. There not a chance on the planet that I’ll tell you to go pick up a “fleece” or payments on a car. You’ve got a great thing going for you – a peaceful, calm and successful financial life. Why would you want to mess all that up with a lease or payments?

Here’s the deal. Consumer Reports AND my calculator both say that leasing a car is the most expensive way to operate a vehicle. It’s a rip off! Dealerships make more money off leases than they do from the sale of cars. I’m okay with you buying a car. You’ve managed your money well, and you’re in great shape financially. But when it comes to the big shiny things, pay cash or don’t buy it!

Dave