Image credit: AP
Image credit: AP

A lot of parents help their kids with a car purchase, and so some of them are floating the idea of leasing a brand new car instead of buying a used one. While this might sound like an inexpensive way to get the newest and safest car, it isn’t the best solution for a new driver.

I’ve given car buying advice to many parents on how to select and shop for a quality vehicle for their kid. Usually, my advice goes like this: research cars that are known to be reliable, make sure you get it inspected by a trusted mechanic, and stick with private sellers over dealerships because you will often get a little more for your money.


But over the past year or so, I’ve encountered several parents that have gotten frustrated with the used car buying process. Often they lack the time, patience, and/or knowledge to successfully buy a quality used car. These folks will sometimes get tempted by super cheap lease deals and think that a sub-$200 car payment doesn’t seem so bad compared to shelling out a few grand in cash, or higher payments, for something that will probably have a bit of miles on it and most likely be out of warranty.

But leasing a car for a new driver could be more of a risk and won’t save you money in the long run.

First, let’s examine the numbers. You could lease something like a brand new Chevy Cruze for $190 a month with $2,000 out of pocket (not including tax and fees) for 39 months, and that means your total cost would be about $9,400 over the course of the lease. That doesn’t seem like a lot of money to spend for a car with an MSRP of around $22,000. But what people often forget about leases is that at the end of the term, you have to give the car back and start all over again.

So if you leased a car for a 17-year-old, by the time they turn 20 and that lease is up, someone is going to have to shell out more money to get another car. Them, or you.


The better financial strategy would have been to take that $9,400 and buy the best used car possible that could stay with your kid well beyond that three-year lease period. If you don’t have $9,400 in cash, you could get a used car loan. In fact, if you were able to use the same $2,000 down payment for the lease on a $9,400 car, that leaves a balance of $7,400. Finance that for three years at a five percent rate and the payment would be $220 a month Stretch that loan to four years, and the payment drops to only $170 a month. Those numbers are very close to the lease payments on the new car, but you get something you can keep for as long as you like.

The other problem with young people and a new leased car is it is hard to predict how that car will be used. Your son or daughter might not be driving far, but if they are taking their car to work, school and events, those miles can add up. You don’t want to be put in a position where you have to pay penalties at the end of the lease because of a mileage overage. On the flipside, if your teen only drives a few miles per week, you would essentially be paying for lease miles that you aren’t using.


Finally, teenagers are statistically more likely to get into a wreck and damage the car. While this may sound like a good motivator to invest in the newest model possible for crash survivability, in all likelihood your novice driver will most likely just end up incurring some variety of minor damage to the vehicle through either careless parking or minor fender benders.

With a lease you are on the hook for every scratch and ding the car suffers at the hands of your kid. You won’t stress about some minor battle scars on a used car you spent a few grand on. Furthermore, as to the safety issue, there are tons of pre-owned models under the $10,000 range that have all things your young driver needs like airbags, ABS and stability control. Most used cars made within the last five years or so should be quite good in terms of safety.


Rather than invest in a new car for fancy safety tech like automatic braking or collision detection, your money is probably better spent on some defensive driver training. While some wrecks may be unavoidable, an alert and focused young driver who knows how to control his or her car properly will pay dividends.

Leasing a car can work great for people who have a clear understanding of their budget and driving habits, but teenagers are far too unpredictable and would be better served with an inexpensive, safe car that can last them a long time—without the stress of car payments.

Tom is a contributing writer for Jalopnik and runs He saves people money and takes the hassle out of buying or leasing a car. (

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