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dfwjim1 wrote:I live in South Florida and whenever I see a car ad on the internet or T.V. it seems like all of the car dealers are pushing leases rather than financing or even paying cash for a vehicle. Is financing or paying cash for a vehicle rapidly becoming obsolete? Personally I really don't like the leasing concept as one does not eventually own his/her vehicle and there are mileage penalties.
Any responses/opinions about auto leasing would be appreciated.
LittleFokker wrote:https://youtu.be/4U2eDJnwz_s
Maybe this has something to do with it? Granted, this segment is more applicable to those who have poor credit and can't get fair interest rates, but with the divide between the haves and have nots getting worse with no meaningful fix on the immediate horizon, leasing doesn't look all that bad.
geologyrocks wrote:
Regardless, cars are money pits. Always have been and always will be. Residual value is great but at the end of the day, they aren't investments so people should just do what makes sense for them in order to support a costly yet necessary item.
WarRI1 wrote:When I was younger, a three year new car loan was standard, now I understand you can get a seven year loan. My mind does not accept that kind of debt for an expensive product that really has no value after it is paid for. I know plenty of people who have no choice but to lease because of economic conditions when retired. You pay and pay and pay and end up with no value when leasing.
dfwjim1 wrote:I saw an ad the other day touting a lease for $750 a month for a Land Rover - wow!
pvjin wrote:I would rather buy and own 15 year old car than lease a brand new one of same model. As far as leasing goes renting an apartment is enough for me, anything more would make me feel like someone who tries to keep up a higher standard of living than he truly can afford to.
Really as far economics of driving go there's nothing better than buying an used Japanese car without too many miles in it, and driving it as long as you can without any too expensive major repairs.
LAX772LR wrote:I would ask, why isn't it a lot MORE popular... especially considering the buying habits of so many people, particularly with luxury cars, where some people prefer the newest body style.
Way back in the day, when I was selling, I had multiple clients whom I'd sold multiple cars within the span of 7yrs, due to body style changes. Tried to talk many of them into leasing, and educating them how they could save--- and they were so terrified of the word, that most wouldn't consider it.
It made NO sense, at all; but then again, sales is so often not a rational transaction.
pvjin wrote:I would rather buy and own 15 year old car than lease a brand new one of same model. As far as leasing goes renting an apartment is enough for me, anything more would make me feel like someone who tries to keep up a higher standard of living than he truly can afford to.
Really as far economics of driving go there's nothing better than buying an used Japanese car without too many miles in it, and driving it as long as you can without any too expensive major repairs.
FriscoHeavy wrote:Leasing a vehicle makes absolutely ZERO economic sense when you really crunch the numbers. Yes, the monthly payment is less, but the cost of capital (fancy way of saying interest, but not having to disclose it as such) is ASTRONOMICAL -- in the 10-15% range typically.
A Car Lease is nothing but a Fleece. DON'T DO IT!
Flighty wrote:Not an expert but one thing I do know is, Mercedes BMW and Lexus compete bitterly with each other for sales dominance using leases. Leases are 60-70% of the luxury auto sales market. This is partly financial and partly convenience. Affluent people have no REASON to own a car beyond its warranty period.
Now, if you want a cheaper, less predictable option, absolutely -- buy a 2006 car, keep it maintained and drive it from age 10 to 20. You'll get a luxury experience for less money. But it's mentally challenging to do that. Stuff breaks, which you have to anticipate. In my experience, successful people have NO time to putz around with auto repairs. Spending even 2 hours per year on their car is a huge annoyance. One they will remember with anger.
Because of the crazy competition, leases or company subsidized loans can be a very good deal. particularly in December. Particularly in late December, as they compete for #1 in the US auto market.
dfwjim1 wrote:I have a friend of mine who
FriscoHeavy wrote:Not everyone has the resources to do that. If I could switch vehicles every 2 years, trust me, I'd be supporting you all the way.My relatives own their vehicles outright and trade them in every 1 - 1 1/2 years for a new one, then just pay the difference, which isn't that much with low mileage after a year or so, plus they actually have an owned asset.
Flighty wrote:It's not just anticipating a breakdown; it's also comparing 2006 features to 2016 features. Whereas in 2006 power windows (for example) were only on select models, in 2016 it's the standard. Whereas in 2006 not all cars had Sirius XM or USB port, in 2016 it's becoming a standard in all cars. So getting a luxury car from so far in the past also means giving up certain conveniences that today are the norm.You'll get a luxury experience for less money. But it's mentally challenging to do that. Stuff breaks, which you have to anticipate. In my experience, successful people have NO time to putz around with auto repairs. Spending even 2 hours per year on their car is a huge annoyance. One they will remember with anger.
einsteinboricua wrote:Frankly, I've never understood the need to drive a luxury car except to brag about how you can afford an expensive car (which then has to be guarded zealously from every scratch or bump). Not that a regular car shouldn't be guarded, the perceived value won't go down as harsh as a luxury car would.
Redd wrote:geologyrocks wrote:
Regardless, cars are money pits. Always have been and always will be. Residual value is great but at the end of the day, they aren't investments so people should just do what makes sense for them in order to support a costly yet necessary item.
That's why I only buy used cars for cash, I don't have to make payments and I own the car outright. I only buy cars I get a good deal on, so every 2 years I sell my car for as much or more than when I bought it and buy a newer model. Always diesel & always German, they hold their value the longest. People would be surprised how cheap a couple year old BMW, VW or Mercedes can be had for. After the initial depreciation they hold their value extremely well.
DocLightning wrote:Redd wrote:geologyrocks wrote:
Regardless, cars are money pits. Always have been and always will be. Residual value is great but at the end of the day, they aren't investments so people should just do what makes sense for them in order to support a costly yet necessary item.
That's why I only buy used cars for cash, I don't have to make payments and I own the car outright. I only buy cars I get a good deal on, so every 2 years I sell my car for as much or more than when I bought it and buy a newer model. Always diesel & always German, they hold their value the longest. People would be surprised how cheap a couple year old BMW, VW or Mercedes can be had for. After the initial depreciation they hold their value extremely well.
I did that! Last may I bought a used German Diesel.
A 2012 Jetta TDI. (wop wop...)
At least I'm gonna get $21K (more than the $18,750 I paid for it) back from VW.
Aesma wrote:What about leasing a battery ? In France you may buy a Renault Zoe or a Nissan Leaf (or others electric cars) and lease the battery.
FriscoHeavy wrote:I know I'd be terrible at selling cars because I have logic and the math absolutely never works in favor of being fleeced into leasing a car.
einsteinboricua wrote:Sorry...pet peeve. If they're a friend, they're yours already. Why would you need to state that you have something that's yours twice?
einsteinboricua wrote:dfwjim1 wrote:I have a friend of mine who
dfwjim1 wrote:einsteinboricua wrote:dfwjim1 wrote:I have a friend of mine who
Sorry...pet peeve. If they're a friend, they're yours already. Why would you need to state that you have something that's yours twice?
Thank you for pointing that out!
DDR wrote:Leasing makes sense for some people. To say that leasing is wrong is just being arrogant because you don't want to do it. I'm in a good place financially after many years of flying. I choose to lease because every 72 months I can trade my vehicle in for a brand new one. But the most important factor for me is that I don't have to worry about repairs. Everything is covered, even tires!
So just because a lease isn't right for you doesn't mean it isn't right for someone else. When I retire, I will purchase a vehicle because then it will make sense.
dfwjim1 wrote:I live in South Florida and whenever I see a car ad on the internet or T.V. it seems like all of the car dealers are pushing leases rather than financing or even paying cash for a vehicle. Is financing or paying cash for a vehicle rapidly becoming obsolete? Personally I really don't like the leasing concept as one does not eventually own his/her vehicle and there are mileage penalties.
Any responses/opinions about auto leasing would be appreciated.
Aesma wrote:What about leasing a battery ? In France you may buy a Renault Zoe or a Nissan Leaf (or others electric cars) and lease the battery.
Luxair747SP wrote:Leasing is also often for people who can afford a Renault (which is completely fine), but want to show off and need to have a Beamer. 100s of examples.
einsteinboricua wrote:Frankly, I've never understood the need to drive a luxury car except to brag about how you can afford an expensive car (which then has to be guarded zealously from every scratch or bump). Not that a regular car shouldn't be guarded, the perceived value won't go down as harsh as a luxury car would.
FriscoHeavy wrote:With all do respect, it's not about being arrogant. It mathematically never makes financial sense if you delve into it....for anyone. Those who try to financially justify it really do not understand it.
prebennorholm wrote:Aesma wrote:What about leasing a battery ? In France you may buy a Renault Zoe or a Nissan Leaf (or others electric cars) and lease the battery.
That's because batteries degrade from day one on the road. Often the documents will tell that 80% of nominal capacity is considered "good".
When you buy an electric car, including battery, and the battery degrades way below 80% within the warranty period - which isn't unusual at all - then you are tempted to accept the struggle of a decent, expensive and independent capacity test for having it exchanged.
When the battery is owned by the dealer, then he will keep on blaming you and your driving ability when you always get stuck on the wayside half way through the expected range of the car. The dealer assumes that few customers will invest in an independent capacity test of a battery which the customer doesn't own. And should that happen, and it fails the test, then the dealer can always exchange it with another old battery which has well degraded.
FriscoHeavy wrote:With all do respect, it's not about being arrogant. It mathematically never makes financial sense if you delve into it....for anyone. Those who try to financially justify it really do not understand it. Now look, I don't care if you get fleeced with a lease until the day you die because it's not my business how you spend your money. I am encouring those who lease to really examine the math behind it and educate themselves.
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PacificBeach88 wrote:FriscoHeavy wrote:With all do respect, it's not about being arrogant. It mathematically never makes financial sense if you delve into it....for anyone. Those who try to financially justify it really do not understand it. Now look, I don't care if you get fleeced with a lease until the day you die because it's not my business how you spend your money. I am encouring those who lease to really examine the math behind it and educate themselves.
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Wow! Your ignorance is on full display. Yes, leasing does make sense for many people, especially when it comes to IRS tax benefits. Just because YOU don't make enough money, nor use a leased car as a main transport vehicle, doesn't mean you know jack sh**e about leasing. For once, maybe you should shut it, as you have no idea what the heck you're talking about when a person is in the 40%+ federal / state / local income tax realm with a business vehicle deduction.
FriscoHeavy wrote:I'm in the top 3%, sir. In addition to having a salaried job, I am a Realtor. I make plenty of money and it doesn't make financial sense. I'm sure you are part of the same crowd that believes you shouldn't pay off your mortgage early because of the "Tax Deduction". It's absolute hogwash.
FriscoHeavy wrote:I live in Texas and yes, debt is bad. But the lease issue goes beyond it keeping you in debt. It's a financial mistake. Not everything is complicated if you do the math. I hope you keep leasing bud, it's not me making the dumb financial move. I'm a very intelligent person and can actually think and do math. I'm simply letting people know on this forum that it's not a smart financial move just because the monthly payment is cheaper and you will have to eventually make some repairs.
I have set myself up (without a lease, mind you) to build a nice chunk of wealth and be able to give back.
PacificBeach88 wrote:FriscoHeavy wrote:I live in Texas and yes, debt is bad. But the lease issue goes beyond it keeping you in debt. It's a financial mistake. Not everything is complicated if you do the math. I hope you keep leasing bud, it's not me making the dumb financial move. I'm a very intelligent person and can actually think and do math. I'm simply letting people know on this forum that it's not a smart financial move just because the monthly payment is cheaper and you will have to eventually make some repairs.
I have set myself up (without a lease, mind you) to build a nice chunk of wealth and be able to give back.
No, YOU have decided debt is bad. I'm not even currently leasing, but have before and run the numbers myself, an MBA graduate, thank you and know when a lease is better than a purchase not to mention, when I ask my CPA for advice.
And now you've even proved my point further! You live in a no-income tax state! Those of us who live in states with an additional 7% to 10% top rate on income will end up with different math than you will. And for the record most leases are only for 2 to 3 1/2 years on luxury vehicles, which is well in the warrantee, unless you drive 20,000+ miles a year.
Did you want to take a stab at figuring out my total tax bill from the USA, Singapore, and Indonesia, and tell me which vehicle purchase / lease is more efficient Frisco? Ya' thought not.
FriscoHeavy wrote:Calm down scout. No need to be so angry. I don't care to figure out your stupid tax bill -- I spend enough time doing ours.
FriscoHeavy wrote:Look, we can agree to disagree. You may have an MBA and I'm very happy for you. However, that doesn't mean you know all regarding finance and debt. We have a President with a law degree, but that certainly doesn't make him competent, smart or have common sense.