Guys who lease their cars...

[Pacfanweb]

Originally posted by: rbloedow
why would you lease a car?

If you trade every 2-3 years, it's the only way to go. As long as you don't exceed the mileage, you're nearly always better off to lease.
Who cares if you build equity in a car? Due to depreciation, most cars won't have any equity until sometime in year 4 of a 5 year loan, and then what do you have? Basically nothing.

The only times it's better to buy than lease, are these:
You keep cars a long time.
You drive over 15k miles a year.
Very low finance rate or large rebate makes buying a better deal.
You can pay cash.

Other that that, leasing is a great option for many people. I don't see why some people obsess over having "equity" in a car. Name a normal (not a Ferrari or a Vette or the like) car or truck that actually stays the same or increases in value. You can't. Nobody ever used a car for a retirement plan, so why worry about equity? If you buy a car, and trade it 2-3 years later, you're upside down, and that negative equity has to either be paid by you, or financed into the new car.
If you KNOW you're going to trade in 2-3 years, AND you drive 15k or less per year, THEN leasing is nearly always the best option.

 

[Armitage]

Originally posted by: kherman

Something you said reminded me of a book. Rich Dad, poor Dad. maybe antoher one. In it, it states, that a majority (90%) of the most wealthy people in america got that way buy BUYING USED CARS! Nice cars, but used to save mucho-cash. I'm sure they are less informed than the rest of us

Another good point!
I guess I shouldn't complain to much about people trading in 2 or 3 year old cars ... makes for a better market in used cars!

When I bought my current car, I paid about $2000 less then the new price for the same model & options (this was for a $14K car at the time) It was only 1 year old with 9K miles on it.
So I paid 14% less for a car that only had approx 5% of it's useful life used (I fully expect to get 20K on this car.)

When I bought my truck last year, the situation was a little different. Late model trucks are holding their value well, and the difference between new & used interest rates is big enough that it ended up being only a little more getting a new truck, and I could get exactly what I wanted. Still pained me on principle though

rob9874 with the Durango: Note that I said a good quality car! I know a few people with Durangos and Dakotas and they almost universally suck wrt repair & reliability. I hate to say it, but you almost can't go wrong with a Honda or Toyota. And it's hard to go right with anything American. I'm sure I just really torched this thread

And finally, I'm not trying to build equity in my car. I know it's impossible. I'll be very lucky to get $1000 when I sell it. But at that point, I'll have been without a car payment on that vehicle for on the order of 9 years. @ roughly $00/month that's on the order of $43000 + interest + reduced insurance. So far I've only spent about $500 on repairs at the 130K mile point. It's never let me sit (more then I can say for any domestic car myself or my family has ever owned) I'm sure that will increase, but I'm still way ahead.

I'm definitely not "scraping by", but that's alot of cash towards a nicer house, more toys, more savings, earlier retirement, etc. And I'm not trying to tell anybody how to live their life/spend their money. Just telling you how I spend mine.

 

[kherman]

Originally posted by: teddymines

Originally posted by: Skoorb

Seriously, replacing a car every 3 or 4 years is absurd.
It's transportation. Get over it.

I agree. If you want a new car every few years a lease may be the best option (or not), but why want it that frequently? I KNOW that too few people realize exactly how costly it is to replace a car that frequently, otherwise they wouldn't do it. You're doing yourself no good to be getting a new car every few years while short-changing yourself of other things in life like a nicer house.

You're assuming people would give up having a new car in exchange for a house. Some people are pretty comfortable living in an apartment and leasing a car. While that may not be your choice, it is theirs, and there is a market to support them.

I do happen to agree with you in that building equity and using cash is something that is becoming less popular. It will, I fear, be the demise of many in the future.

boldfaced section should read "It will be the demise of many in the future"

 

[kherman]

Reading this thread has caused me to have a revelation.

1) Some people know how money works and how to build wealth, others do not.
2) Wealth is a realitive term. Wealth is a comparative word as it seperates people into various economic categorys.
3) i want to be wealthy.

Based on this, I THINK EVERYONE SHOULD LEASE THEIR VEHICLES! I encourage EVERYONE that buys cars, to stop doing so and begin leasing as soon as possible! As soon as your lease runs out, lease another NEW SHINY car!

in doing so, you are helpng me attain my goals.

 

[teddymines]

Originally posted by: kherman
1) Some people know how money works and how to build wealth, others do not.
2) Wealth is a realitive term. Wealth is a comparative word as it seperates people into various economic categorys.
3) i want to be wealthy.

Also, people have different definitions of wealth. You seem to define it as assets that, when converted into currency, give you a certain dollar amount. Others seem to define it as a feeling or satisfaction they get from something they possess, sometime temporarily as discussed in this thread, like a car.

With the former, the wealth factor is usually private. Only you know how many dollars your assets are really worth, and by driving an older car and saving money, you are not advertising anything. With the latter, it is totally subjective and not bound by any standard measurement. All you can do is look at the BMW 740IL and (possibly incorrectly) assume, "That guy has a lot of wealth."

skoorb understood my comment about people not having equity when they retire.

 

[transluko]

LostHiWay is either financially or emotionally involved with leasing.

Leasing has advantages and buying has advantages.

Most people on this board are against leasing and for buying, yet most of them should actually lease.

Typically leasing is a better choice if you don't plan on driving a car until it dies. If you buy a car then trade it in for a new one after 3-5 years your pissing money away. You can do the same thing with a lease and pay half as much per month!!

A car never gains in value, it's aways depreciating. Why would you want to buy something they goes down in value??

The only thing you have to do with a lease is keep it in good condition (which you would do if you bought the car anyway), and stay within your miles. Typicaly 12,000 - 15,000 per year (not to hard, at least for most)

He could also not know about leasing