I Haven't Had a Car Payment in 6 Years. Here's Why I'm About to Start Leasing a Car Instead

My husband and I bought our Toyota Prius in 2007 and paid it off in a short period of time. We then went the same route when we bought our minivan in 2014. We were able to snag an affordable interest rate on a three-year auto loan, so we paid off that second car in 2017. As such, we've been car-payment-free for the past six years.

Not having a car payment to deal with has given us a lot more flexibility. The average monthly payment for new vehicles hit a record high of $730 during the first quarter of 2023, according to Edmunds. By not spending anything in that vicinity, we've had the option to put more money into our savings account and spend more on leisure and vacations.

But unfortunately, our streak of being car-payment-free is coming to an end. My husband and I recently put down a deposit on a car lease that may not begin until 2024 due to our new vehicle not being available until then. But once it comes in, we'll have a monthly car payment on our hands. Still, we feel that's a necessary move for us for a couple of reasons.

1. Our Prius is on its way out

Cars can only last so long, and our Prius has been showing signs that it's not going to last much longer. Seeing as how it's more than 16 years old, that's not even something I can get upset about, because the car had a good run.

But because we live in suburbia and have kids with conflicting schedules, we need to be a two-car household. And we need two reliable cars we can count on. The Prius is starting to no longer fit that bill, so getting a replacement car seems inevitable.

Also, a Prius is an okay car to drive if you have a smaller family. But even though my three kids are fairly young, it's cramped in the back when we drive it around. And the Prius doesn't allow room for our dog to ride along, so that's another reason it no longer serves our needs.

2. We don't want to commit to a new car purchase

Because I've owned and driven the same cars for a long time now, I'm not really sure what I want out of a new car. My husband, meanwhile, really wants a plug-in hybrid, but because that type of car is new to us, we don't want to purchase one outright in case it ends up being a poor choice. That's why we're opting to lease our next car rather than buy it.

I recognize that leasing may not be the most cost-effective option. But at this point, it's what we're most comfortable with.

It's going to be difficult having a monthly lease payment to cover after so many years of getting a break from that expense. The silver lining is that I know those payments are about to start coming due, so I'm able to make some changes to our household budget to allow for them.

In fact, we plan to start implementing those changes come July, which is a good number of months before our lease will likely begin. That way, we'll be used to our new budget once we start having to make those payments.

All told, taking on any new expense is an adjustment. And when you're taking on the expense of a car payment, whether for a vehicle you own or lease, it can be even tougher to get used to. But thankfully, we have a heads-up that our financial situation is going to change. And we're forcing ourselves to adjust our spending now so we're ready once our lease begins in 2024.