To Lease, Buy, or Have No Car at All? How 2022’s Used Car Market Shifts Things

The Money with Katie Show

Money with Katie

Self-improvement, Education, Business, Investing, How To

4.8 • 1.3K Ratings

🗓️ 3 August 2022

⏱️ 48 minutes

🔗️ Recording | iTunes | RSS

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Summary

I sold my car in March 2021 and have (mostly) never looked back as part of a one-car couple, but my husband and I have been dabbling with the idea of getting a new car this year. Unfortunately, 2022 is…not a great time to buy a vehicle, as anyone who’s perused the used car market knows. It inspired this episode in which we break down the lease vs. buy decision in today’s car market with guest Jorge Diaz, author of Car Leasing Done Right (https://www.leasecosts.ca/en/book). As part of the episode, I wanted to do an IRL lease vs. buy comparison with a luxury car—so I reached out to a Porsche dealership to pull numbers on a 2023 Macan. What I wasn’t expecting as part of my number-crunching journey: being immediately plunged into an inferior sense of class consciousness as a result of the interaction. That’s…a fun bonus in the episode. 😂 Mentioned in the Episode - Car market prices up 24% in 2021 (via The Washington Post): https://www.washingtonpost.com/us-policy/2021/10/28/used-car-prices-chip-shortage/ - Rule of thumb for paying for a car: https://www.nerdwallet.com/article/loans/auto-loans/much-spend-car - “Why Leasing a Car is Like Setting Money on Fire”: https://moneywithkatie.com/blog/why-leasing-a-car-is-like-setting-money-on-fire - Study: Driving fewer than 10K/year: https://www.rockethq.com/learn/personal-finances/how-expensive-is-uber - Pregnancy Discrimination Act: https://www.eeoc.gov/pregnancy-discrimination — Follow Along - Listen to Money with Katie here: https://www.podpage.com/money-with-katie-show/ - Read Money with Katie: https://moneywithkatie.com/ Follow Money with Katie! - Instagram: https://www.instagram.com/moneywithkatie/ - Twitter: https://twitter.com/moneywithkatie - TikTok: https://www.tiktok.com/@moneywithkatie Subscribe to Morning Brew - Sign up for free today: https://bit.ly/morningbrewyt Follow The Brew! - Instagram: https://www.instagram.com/morningbrew/ - Twitter: https://twitter.com/MorningBrew - TikTok: https://www.tiktok.com/@morningbrew Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Welcome back rich girls and boys to The Money with Katie Show.
0:10.5	I'm your host Katie Gatti Tossan and today we're going to talk about likely one of the
0:16.6	largest purchases you will make in your lifetime.
0:20.2	Your vehicle.
0:27.7	In 2021 I sold my used 2017 Audi A3 for almost the same price that I paid for it when I
0:36.9	bought it a year earlier despite having roughly $4,000 worth of body damage after cutting
0:43.0	the turn into the garage a little too closely a week into the panorama.
0:48.2	The sale price illustrates the bizarre nature of the used car market mid and post pandemic.
0:55.2	Not the pandemic is over but the height of it is hopefully behind us now.
0:59.6	So why are things so jacked up?
1:02.1	Well for one thing there's a chip shortage and cars are loaded with microchips.
1:07.5	So there are fewer new cars on the market.
1:11.3	This means that the market for used cars is hot and in 2021 prices were up 24% according
1:19.0	to the Labor Department via the Washington Post.
1:22.6	It seems like a continuation of this broader theme.
1:26.9	The pandemic and its second and third order effects turning things on their heads and making
1:31.6	us question what has been previously unquestioned fact.
1:36.8	In other words used cars are always cheaper, better and more prudent.
1:40.8	When I first got into financial independence the advice around buying a car if you wanted
1:45.2	to build wealth quickly was pretty straightforward.
1:47.6	Buying a used inexpensive sedan from a brand like Honda or Toyota in cash aimed to spend
1:54.0	no more than 5 to 7 grand and resume your life in the 1999 Honda Accord and pretend that
	...

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