LSUtigerME

1. Yes the residual is often higher than actual resale value, that's why I clarified it. This only hurts the "Purchase" case as you now have a vehicle that's worth less (which adds to your total investment). Second, you do not pay more when you lease (not including cash back incentives). Purchase price is negotiated just the same.

2. This is true, but assumes you trade it in. You may also get tax rebate on paid vehicle taxes (may have expired now). I don't believe you get same tax credit (on next vehicle) through private sell.

3. There may not be a CD, but there's always stock market, or simply applying money to a higher interest loan (ie. Other car note or mortgage, etc.).

I think the point, even with that adjustment, leasing is not the terrible option people paint it to be. And it puts you in a new vehicle more often. This is only true for people who do not keep vehicles long term (depreciation with diminish over time), and can keep to the mileage requirements.

gooddeal

1. Well, you have to count that.

3. I still have plenty of money collecting 1% interest. My retirement is doing worst than the 1%.

However, I agree that leasing is not bad. Especially, for those who don't have money to pay in full. The only thing I hate about leasing is that I have to keep the car for the term, 39 months, etc.

RIDEwithG

Not necessarily. I sold my G37 least April and got back nearly $1200 back. Yes, it was a lease.

All in all, my MSRP was $35k and it was leased at $32k. $1200 upfront, $424 a month with 9.75% tax. I basically got my inception fees back and only paid the $424 over 36 months or $15264 over 3 yrs. You pay for what you use, that is the essence of what leasing is all about.

General comment here...

I think the issue at hand is that some folks resort to the "you get to ride your bike to work after your 3 years is over" mentality. Now really!?!? your only choice is to ride your bike to work after 3 years? How about you take that extra $15k+ you were saving (instead of having it spent by buying the car cash) and pay off the car at least end? No bike necessary.

kaoticdemize

iTrader: (2)

This thread lost all merit when it started off comparing a new lease to a purchase of a used vehicle. Cannot compare sorry.

RIDEwithG

True. I guess if you hate something, you will go to great lengths to make it look bad.

mtrsprt

I wouldn't either, and I definitely wouldn't lease a car.

You would be surprised what people actually pay a month for cars when they have crap down payment, and interest rates above 10%.

I got a 26 year old machine operator of mine at work that is paying 749.00/month for his 2008 M5. ($48,000 sticker with 47K miles on it) He is paying to own though.

Leasing doesn't make it yours. Ever. Your renting it long term and throwing away money IMO.

Beer Magazine

I think you don't understand leasing, or what the value is. There are lots of posts explaining why a lease works for some and why it doesn't.

Here's the quick
If you took what the lease payment was and subtracted that from the loan payment (even though leases are shorter they are usually cheaper) if you put the amount you saved on a lease in the bank at the end you'll have just about the same money if you sold the car at the end of the loan and "got your ownership".


Here is a great example of why a lease is sometimes better.

We lease an 04 VW Touareg V8 just before gas prices went nuts. If I had bought the car we would have been upside down until the end. The value of the car dropped a staggering $7,000 below what the residual had...you know who ate that loss....VW.

If you actually understand leases they can be great. If you don't you get screwed.

Beer Magazine

Enjoy your grey one and learn to love it. Or take the huge hit for buying the wrong car and pay $750 a month.

The Jewbag

iTrader: (1)

Lol. OK. So keep paying interest on your depreciating liability. Your accountant must love you

mtrsprt

This is your defense? It's called good credit, and short term notes. It's called responsibility and true ownership.

From someone with a username such as: Jewbag, it sure doesn't match how you don't mind throwing away money.....

jddssc121

some of us actually pay off our loan, and then drive a car with no payments. Imagine that!

RaphTheTurtle

The interest rate on my lease is right around 0.1%. That's basically Infiniti giving me a free loan for three years. Why not take it?

jddssc121

what do you have to show for those payments at the end of 3 years?

Vasher

Let's debunk two silly notions;

1. Leasing is never a good idea.

I have great credit. I purchased a 2010 coupe in 2-10, planned on keeping it 5-6 years. MSRP $45,900, got it for $41,700 +TTL, put down $3k, financed @ 2.9% for 66 months through Infiniti FS, payment $750.

Had to replace that car. 12-10 picked up an '11 coupe, exact same car (except went from black to white), exact same MSRP, paid the same for it. Only difference is that I knew I didn't want it long term. 24 month lease, only paid first months payment up front. $600 a month.

The lease will cost me $14,400 over the 24 months. Had I purchased it again it would have cost me $21,000 over those same 24 months and I would have ~0 equity in the car at that time.

2. It is "smarter" to pay cash up front for your car vs. lease/finance.

That's ridiculous. After TTL on either of these cars it's back at $46k. I can take that $46k and generate a much greater return than 2.9% annually. Some banks offer .9-0% financing. With rates that low even those less savvy could just get a CD.

jddssc121

(stay with me before you pound your keyboard)

From a *purely financial* perspective, buying and "holding" (keeping car past note end) is *always* better than leasing. Even sites that are pro leasing will tell you this. (scroll down for example Lease vs Buy? Car Leasing versus Buying Explained)


However, for those that don't hold their cars past the end of the note (for whatever reason, but usually because they like always having a new car) then leasing vs buying becomes trickier to answer. Yes, buying and holding is still the best option, but if you're going to ignore that, then what is the best way to minimize your losses for your new car addiction? Probably leasing. But you're picking the lesser of two evils at this point

Last time i was car shopping I calculated the break even points over 15 years of car ownership vs leasing. Leasing *always" costs more over the long term *if* you hold your car past the payoff date. For me, it was an extra monthly cost (annualized from the 15 year total) of $150 *more* to lease vs buy. Now of course, for this extra $150, i get a car that is never out of warranty, and is always relatively new. If that is worth it to you, then by all means - lease your heart out. I prefer to pocket that extra $, even if I have to own my cars for a few years longer.