You’ve probably heard all the typical car-buying advice: “Buy used, never lease, pay cash if you can.” But what if that advice is actually keeping you from making smarter financial decisions? Personal finance expert Ramit Sethi recently broke down how wealthy people approach car purchases, and it’s completely different from what most people think.
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Here’s what separates how rich people make these big purchases from everyone else.
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They Don’t Ask the Wrong Question
Most people walk into a dealership thinking about one thing: monthly payments. Sethi said this is completely backward thinking.
“Can I afford the monthly payment?” he said. “You’re never going to say that phrase again. It’s never going to come out of your freaking mouth. That phrase comes from people who do not know anything about money.”
Instead of focusing on monthly payments, wealthy people think about TCO, total cost of ownership. This includes everything: gas, insurance, maintenance, registration and even parking fees.
Sethi shared his own example: “When my car payment used to be $350, total cost of ownership was actually over $1,000 a month when factoring in everything.”
His rule? Take whatever monthly payment you’re considering and at least double it. That’s closer to what you’ll actually spend.
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They Think Beyond Just Numbers
Here’s where it gets interesting. Rich people don’t just ask, “What’s cheaper?” Instead, Sethi explained, “They ask, ‘What gives me more control, more time, more peace of mind? What fits into my rich life?’”
This means they consider factors like:
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How much time they want to spend dealing with car maintenance
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Whether they value having the latest safety features
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How important convenience is to their lifestyle
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Whether they want to avoid surprise repair bills
The key difference? They make these decisions intentionally based on their priorities, not just outdated advice from relatives.
They Don’t Even Go To Dealerships
Many wealthy people completely skip the traditional car-buying experience. It’s true! “A lot of my friends text their car guy, someone who finds the car, negotiates the deal, even has it delivered to their house for a test drive,” Sethi shared.
This approach isn’t necessarily about getting the absolute lowest price. It’s about saving time and stress, which they value more than squeezing out every last dollar in savings. The wealthy understand that their time has value, and spending hours at dealerships haggling isn’t worth it when they could be focused on more important things.
They Still Run the Numbers (Just Differently)
Don’t think rich people are careless with money. “They still run the numbers,” Sethi emphasized. But they approach the analysis differently.
When comparing a $63,000 Ford F-150, Sethi showed that buying would cost about $92,624 over six years when you factor in everything, while leasing the same truck back-to-back would cost $109,514. The buying option saves about $17,000.
But here’s the twist: For electric vehicles like a Rivian SUV, the math can change dramatically due to manufacturer incentives and special financing rates.
They Use Strategic Thinking About Leasing
Contrary to popular belief, wealthy people often choose to lease in specific situations:
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When they want the newest safety features and technology
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For business vehicles where they can deduct lease payments
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When they prefer to avoid maintenance headaches
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When manufacturer incentives make leasing financially attractive
“Some choose to lease for convenience to preserve cash. Others buy and hold for 10-plus years to minimize that cost over time. Either way, the decision is intentional,” Sethi explained.
They Follow the Real Rules, Not Emotional Ones
Wealthy people ignore emotional decision-making and family advice that might not apply anymore. Instead, they use concrete guidelines:
The 60% Rule: All fixed costs (rent, bills, debt payments, total car expenses) should stay under 60% of take-home pay.
The 28/36 Rule: Housing costs should be under 28% of gross income, and total debt (including car loans) should be under 36% of gross income.
If a car purchase pushes you over these limits, it’s too expensive regardless of how much you want it.
They Think Long Term
The average car on the road today is over 12 years old, meaning people keep vehicles longer than ever. Wealthy people factor this into their decision-making.
If you’re planning to keep a car for more than six years, buying almost always makes more financial sense. But if you prefer driving newer cars with warranties and don’t mind ongoing payments, leasing might fit your lifestyle better.
They Consider All Options
Rich people don’t limit themselves to new cars. “You can also buy a pre-owned car that’s already depreciated. That might actually be the best financial move of all because someone else took the depreciation hit and you get that value,” Sethi said.
This approach combines the benefits of ownership with lower upfront costs.
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This article originally appeared on GOBankingRates.com: 8 Ways the Rich Buy and Lease Cars Differently Than You, According to Ramit Sethi
