Purchasing, Leasing, and the 84 Month Loan: What Is Best in Today’s Market?

It feels like the cost of almost everything is rising, from groceries and housing to insurance, maintenance, and everyday essentials. If you are in the market for a vehicle, you might be asking yourself: Should I purchase, lease, or look into alternatives like car sharing, ridesharing, or public transit?

For decades, car buyers had two main choices: buy or lease. But the auto landscape has shifted dramatically since I bought my first car in the late 1990s. The biggest changes? Vehicle prices and financing structures.

The Reality of Leasing Today

Leasing is still available, but the days of common $299 or $399 monthly lease specials, which we saw even during the early post COVID era, are largely behind us. Lease payments have climbed significantly, driven primarily by average new vehicle prices hovering around $50,000. While promotional lease deals do still exist, they require sharper hunting.

If you purchased a vehicle during the peak supply chain shortages, trading it in today adds another layer of complexity. Many buyers paid high dealer markups or sticker prices back then. As inventory normalized and values recalibrated, many drivers now find themselves underwater, owing more on their current loan than the car is worth. Trading in with negative equity means rolling that balance into your next vehicle, driving your new payment even higher.

Option 1: Leasing (Predictability Over Ownership)

Despite higher costs, leasing remains a powerful tool for specific driving habits:

• Predictable monthly cash flow: You know your exact fixed cost each month.

• Built in protection: The vehicle stays under factory warranty for the duration of the term, minimizing unexpected repair bills.

• Clear exit strategy: You return the car after 2 to 3 years without worrying about long term maintenance or trade in valuation drops.

The Trade off: Critics point out that when the lease ends, you walk away with zero equity. However, advocates view a car as a depreciating asset, an essential tool that gets you to work, transports your family, and supports your lifestyle, rather than an asset meant to build wealth.

Option 2: Purchasing & The Rise of the 84 Month Loan

Purchasing remains the most common route, especially given that the average age of cars on US roads has stretched past 12 years. Owning a vehicle long term allows you to eventually eliminate a monthly payment entirely.

However, high interest rates mean 0% APR or ultra low promotional financing offers are much rarer today. When you do find a legitimate low rate manufacturer incentive, taking advantage of it can save thousands.

With the average new car note now over $750 a month, keeping payments manageable against $50,000 price tags has become a major challenge for many households. To offset these rising costs, dealerships and lenders increasingly offer 72 and 84 month (6 to 7 year) auto loans.

Is an 84 month loan right for you?

The Upside:

• Lower monthly outlay: Stretching the term lowers the immediate monthly payment, freeing up room in your budget for other living expenses.

The Hidden Risks:

• Significantly higher interest: You pay interest over a much longer period, driving up the total cost of the vehicle.

• Extended negative equity: Cars depreciate fastest in their first few years. With a 7 year loan, you will likely owe more than the vehicle is worth for the majority of the loan term.

• Post warranty repairs: By years 5, 6, and 7, factory warranties have usually expired. You risk paying for major mechanical repairs while still making monthly loan payments.

Getting Creative with Mobility

Before signing on the dotted line, take a close look at your financial goals, annual mileage, and regional infrastructure. Beyond traditional buying and leasing, consumers are getting creative to manage transit costs:

• Car sharing platforms and subscriptions: Options like Zipcar or peer to peer rentals for occasional errands.

• Family fleet scheduling: Sharing fewer household vehicles through coordinated schedules.

• Hybrid commutes: Combining ridesharing, carpooling, biking, and public transit for daily travel.

We are all navigating a challenging economic environment and doing the best we can with available resources. The key to staying ahead in today's auto market is doing thorough research, knowing the full cost of financing before you negotiate, and choosing the structure that aligns best with your long term financial health.