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Started By
Message
Leasing a vehicle vs. buying?
Posted on 9/18/17 at 12:02 am
Posted on 9/18/17 at 12:02 am
Are there any benefits to leasing a vehicle as opposed to buying? I know leases usually have lower monthly payments, but is a lease worth it?
5
Posted on 9/18/17 at 12:06 am to Wes225
If you are going to make a bad financial choice in getting a new car every few years, leasing softens the blow a little.
Other than that, not really any benefit to leasing TBH.
Other than that, not really any benefit to leasing TBH.
Posted on 9/18/17 at 12:34 am to Wes225
Rarely is a lease the better financial decision but it does allow you to switch cars easier / more frequently every few years.
Posted on 9/18/17 at 7:28 am to Wes225
Leasing is a better option typically if you are getting a vehicle allowance from your company.
This post was edited on 9/18/17 at 7:29 am
Posted on 9/18/17 at 7:45 am to Wes225
quote:
but is a lease worth it?
Nope. You get nothing for your money.
Posted on 9/18/17 at 7:52 am to Wes225
Top 5 question...
Check the sticky thread at the top for a few discussions around this. Or search.
Yes it can make sense when compared to financing a similar new vehicle over the same time frame.
No it is not financially advantageous over buying a used vehicle (depending on maintenance costs) or keeping a vehicle for 10 years or more.
You don't "get nothing for your money". You get the exact same thing you get by financing it.
Check the sticky thread at the top for a few discussions around this. Or search.
Yes it can make sense when compared to financing a similar new vehicle over the same time frame.
No it is not financially advantageous over buying a used vehicle (depending on maintenance costs) or keeping a vehicle for 10 years or more.
You don't "get nothing for your money". You get the exact same thing you get by financing it.
Posted on 9/18/17 at 8:53 am to LSUtigerME
When financing, you get the car at the end of the term. With leasing, you get a purchase option. They are not equivalent.
You get "nothing" is also overstated. You get years of operating the vehicle which is definitely something.
Leasing a car is similar to renting an apartment. You get the use and have the shorter term mobility of changing what you drive/where you live without necessarily owning the physical asset at the end of the contract.
You get "nothing" is also overstated. You get years of operating the vehicle which is definitely something.
Leasing a car is similar to renting an apartment. You get the use and have the shorter term mobility of changing what you drive/where you live without necessarily owning the physical asset at the end of the contract.
This post was edited on 9/18/17 at 8:57 am
Posted on 9/18/17 at 9:18 am to lynxcat
Advantages of leasing:
lower monthly payments up to 60% lower.
no trade in hassle or negotations on trade.
in full warranty during lease.
No chance of negative equity.
When buying higher monthly payments, money down, responsible for maintenance costs after warranty is over, potential negative equity.
If you are the type that keeps your vehicles 6-7-8 years then leasing probably isnt for you.
If you typically get a new vehicle every 3-4-5 years and put less than 20,000 miles year then your probably a strong candidate to lease.
lower monthly payments up to 60% lower.
no trade in hassle or negotations on trade.
in full warranty during lease.
No chance of negative equity.
When buying higher monthly payments, money down, responsible for maintenance costs after warranty is over, potential negative equity.
If you are the type that keeps your vehicles 6-7-8 years then leasing probably isnt for you.
If you typically get a new vehicle every 3-4-5 years and put less than 20,000 miles year then your probably a strong candidate to lease.
Posted on 9/18/17 at 9:38 am to basiletiger
quote:
If you typically get a new vehicle every 3-4-5 years and put less than 20,000 miles year then your probably a strong candidate to lease.
THISSSSSSSS
I put less than 8k miles on my vehicles a year and enjoy the nice ride with mindless maintenance.
Posted on 9/18/17 at 10:22 am to basiletiger
Also tax benefits if you own your own business and use the vehicle for business purposes.
Or, like my FIL, your wife wants a new car every 3 years and the money is cheap compared to her happiness.
Or, like my FIL, your wife wants a new car every 3 years and the money is cheap compared to her happiness.
Posted on 9/18/17 at 10:28 am to GaryMyMan
quote:
Also tax benefits if you own your own business and use the vehicle for business purposes
You get the same benefit buying the car
Posted on 9/18/17 at 11:21 am to lynxcat
quote:
When financing, you get the car at the end of the term. With leasing, you get a purchase option. They are not equivalent.
Semantics aside, they are equivalent. That purchase option is simply a balloon payment, with a predetermined buyer under set conditions. In both cases you "get the car". In leasing, similar to a 5/1 ARM or balloon mortgage, you're gambling on the future value.
quote:
Leasing a car is similar to renting an apartment. You get the use and have the shorter term mobility of changing what you drive/where you live without necessarily owning the physical asset at the end of the contract.
This is a terrible analogy because it compares financing terms of a depreciating asset against one that does not. Most leases have a lease fee less than $100/month. The vast majority of the payment is comprised of depreciation. This depreciation is the same regardless of lease or purchase.
Posted on 9/18/17 at 11:25 am to Tigerpaw123
quote:
You get the same benefit buying the car
IRS Section 179 is not that simple. A vehicle under 6,000 lbs GVWR is limited to $11,060 in depreciation deduction. Whereas a leased vehicle can have the entire lease price deducted, to the proportion for which the vehicle is used for business use.
I'm a sucker for the $25,000 bonus depreciation deduction allowed for SUV's over 6000 lbs GVWR, though.
This post was edited on 9/18/17 at 11:28 am
Posted on 9/18/17 at 9:12 pm to LSUtigerME
quote:
This depreciation is the same regardless of lease or purchase.
wrong.
the lease payment is determined by the depreciation, money factor, selling price, and maybe one or 2 other variables (incentives, security deposits).
ever hear the term "some cars lease well" or "some cars lease better than others" ?
it's because manufacturers are willing to push leases of certain models, so in order to make the lease payments extremely attractive, they either decrease the money factor, artificially inflate the depreciation, or both. The cars that typically lease well will always be under water at the end of the lease term, because the pay off (calculated by the residual) is much higher than the current value.
the people that make a blanket statement like leasing is dumb or a waste of money are 100% wrong. there are situations when leasing can be better than purchasing. there are also people that are not good candidates to lease a car. different strokes for different folks.
Posted on 9/18/17 at 9:13 pm to GaryMyMan
If it was such a great deal, don't you think more people would be doing it than not?
Posted on 9/22/17 at 3:58 am to seawolf06
Only if mileage isn't a issue
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