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iQuestions Faculty, Ron Blue 
 
 
Question: 
 
Should I buy or lease my new car? 
 
Answer: 
 
You know, I’ve been asking myself that question for thirty years— 
“Does it make more sense to buy, verse lease?” Every time I have run 
the numbers, it always makes more sense to buy than to lease. 
 
The reason for that is this: when you buy, you have your cost of 
borrowing, you have your depreciation, your maintenance, and all of 
that, and when you lease, the lender, the auto-dealer, builds all of that 
into the lease, and they add on to that a profit margin.  
 
So, if you just ran the numbers and if you thought about this 
rationally, it always makes more sense to buy than to lease, and it will 
always make more sense to pay cash for a car than to even borrow to 
buy a car. So, the best decision that you can make in buying a car is 
to pay cash for the car that you’re going to buy. 
 
Now, I’ve done that over the years, and I’ll have to admit that I love 
new cars. I’ve disciplined myself that I don’t buy a car very often, but 
when I do, I pay cash for it. 
 
Several years ago, I bought a luxury car, and I’ve had it now for about 
seven years, and it is a Lexus, and I wanted a new car. I have a 
financial planner that I work with, just to hold me accountable. And so, 
I called my financial planner and I said, “You know, I wrote some 
books about buying verses leasing, and paying cash for cars, and so 
forth, and ‘the cheapest car you will own is the car you presently 
 
 
have.’ I’m sure the rules have changed, since I’ve been out of this for 
a while.” 
 
Well, he got back to me within just a matter of hours and he said, 
“Ron, I hate to tell you this, but the rules haven’t changed. The 
cheapest car you will ever drive is the one you’re presently driving, 
and if you’re going to buy another one, pay cash for it.” 
 
Well, I knew I couldn’t buy a new car, and just a few days later, I was 
driving down a street near our home, and a car pulled out in front of 
me and I hit it broadside. It totaled the other car. My car, I was sure 
was totaled. Nobody was hurt — and as soon as I found out nobody 
was hurt, I said, “Yes! God is providing an opportunity for me to buy a 
new car, because I have to buy a new car.” 
 
Unfortunately, my insurance agent on Monday, when I told him what 
had gone on Saturday, said, “You know, we never total a Lexus. It’s 
always cheaper to repair a Lexus.” 
 
So, I am now driving a used and wrecked—repaired-wrecked—but a 
used and repaired Lexus, because I followed my own principles on 
this. And I’ve got to confess to you, I didn’t like it, but it was the right 
thing to do, and certainly my wife agreed with this decision also. 
 
I hope that maybe helps you and encourages you that I’m just like you 
are. 
 
 
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