The Carr Report: Car Leases = Forever Payments

by Damon Carr, For New Pittsburgh Courier

I recently wrote an article titled “Never pay more than half your annual salary for a car!” I got the idea to write that article based on a conversation I had on Facebook after sharing a story about Shannon Sharpe paying $250,000 for a car in his early years of playing in the NFL when his salary was $375,000 per year. Shannon admitted to it being a foolish decision at the time. 

The very next day, I shared a meme on Facebook that stated, “Car sickness is the feeling you get in the pit of your stomach when it’s time to make the car payment.” I go on to say, “The worst car accidents happen in the Car Dealership Finance Office when you sign the car note. This meme sparked as much conversation as the Shannon Sharpe story. Again, Shannon admitted that buying a car that was 75 percent of his salary was foolish. Do you want to know what’s more foolish than paying more than half your annual salary for a car? The answer is leasing a car. Below is some conversation I had online regarding leasing a car:

I never feel car sickness when I make a car payment. I’ve been leasing cars for 21 years.  It’s just writing a check for good riding and no car problems. Simply drive and go!


Damon says: WHOA! 21-years of non-stop car payments. That’s 252 consecutive payments. That might be the longest strand of consecutive car payments I’ve heard to date.


I’ve been leasing for years. My budget has always allowed for a car payment.  I like getting a new car every three years. It’s just a personal preference.


Damon says: I agree Personal Finance is more personal than it is finance. It’s definitely all about personal preference. Answer me this:  You’re a Top Realtor.  I’m sure you frown upon the idea of renting a home vs owning a home. Although there is a time and place where renting a home makes sense, does the same mindset apply to renting (leasing) a car vs owning a car? If not, why?


Correct. I don’t agree with renting homes. I have owned two homes but homes build equity.  You buy cars and when you pay them off they are not worth anything. I just bought a brand new car that I own and I paid cash for it but I still have my lease vehicle too. I drive the one I own to work and cross town to save mileage on my leased vehicle. I’ve always owned two cars—one I lease and one I own to get to and from work. 


Damon says: Cars build equity as well. Let me rephrase: Cars you purchase build equity. Leased cars build zero equity given the fact you’re essentially renting the leased vehicle for the duration of the lease. You’re renting the car, accumulating no equity, and you have various restrictions during the term of the lease. Making payments on anything – be it a house or a car and not accumulating equity is a red flag in my book. Lastly, the fact that you had to purchase a car to avoid going over the mile restrictions is an illustration of limitations you have when you lease a car versus when you own a car. 

There are 2 primary reasons people lease cars: Low monthly payments and the opportunity to drive a new car every 2-4 years.  As a result, more and more cars are being leased as opposed to being financed or bought outright. The average monthly lease payment is $460 per month. The average term of a lease is 3-years. $460 over 3-years or 36 total payments is $16,560. That’s $16,560 the average person pays for the duration of a car lease. $16,500 for the privilege to rent the car for 3 years. At the end of the lease, you give the car back, then lease another car. Sounds like a Forever Payment to me.  Good deal for the Car Dealership and Lender! Bad deal for the person leasing the car. In your case, if you have been leasing cars for 21-years  —assuming you had an average monthly lease payment of $460 per month. You’ve paid over $115,000 in lease payments and don’t hold the title to any of those cars you leased. That’s a lot of money for joy riding.


For me, leasing cars is my preference.  I have never been strapped for cash while I have been leasing and I honestly like having two cars. My car is good on gas mileage and my truck is good for my trips.  My income allows me to lease and I’m still going on vacation 3-4 times per year. It doesn’t matter to me what I pay out on a lease at all.  I will be leasing until I die. I honestly enjoy getting and trying new cars every three years.

I pay for no maintenance on my leased vehicle. My oil changes and tire rotations are free.  People who buy cars have to pay for these services and still make payments.


Damon says: As you stated earlier. It’s all a matter of personal preference.  I’m not trying to convince you one way or the other. I’m just offering a different perspective for others to chew on.

Regarding maintenance. There is an added fee to the monthly payment for various services. This ensures loyalty to the car dealership’s car mechanical and servicing department. It also ensures that you’re keeping maintenance up on their car you’re renting from them. Those services that are offered are capped based on which service plan you signed. For example, you may be allowed 6 oil changes and 6 tire rotation over 3 years. After that, you pay. Service you pay for and don’t use, you lose at the end of the lease.

In regards to car repairs, I’m not advocating buying lemons and hoopties. Car repairs are generally cheaper than car payments over the course of a year.


Clearly, Ebony has her mind made up. I’m not going to convince her that car leases are a bad deal for the consumer. I hope that I impressed upon you that low payment on car leases = Exorbitant Total cost to the consumer because you’ll be making payments forever, you’ll incur several fees associated with leasing cars and you’ll never own the car. Forever Payments + Debt + No Owner is a huge price to pay!

(Damon Carr, Money Coach can be reached at 412-216-1013 or visit his website at



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