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re: Lease vs buying vehicle advice
Posted on 7/29/15 at 1:28 pm to LSUChamp06
Posted on 7/29/15 at 1:28 pm to LSUChamp06
quote:
Lease vs buying vehicle advice
Its pretty simple
Calculate your lease terms for a PV
Calculate your buy terms for a PV
Compare.
1
Posted on 7/29/15 at 1:32 pm to barry
If you plan on keeping a car til it dies, is it better to lease or buy initially?
This post was edited on 7/29/15 at 1:34 pm
Posted on 7/29/15 at 1:36 pm to Napoleon
quote:
Napoleon
quote:
Each is a purchase in a sense though
Nope.....IF you buy at the end of the lease that's a separate transaction.
Just upping your nitpicking with my own
Posted on 7/29/15 at 1:37 pm to LSUChamp06
I've always heard that you should buy vehicles just because it's better to own. However, my mom always leases. They usually always drive around in my dads truck, but she always has an SUV just in case they need it or if my dad's out of town. It honestly sounds like it just depends on how much you drive to me.
I bought my first vehicle in May and never thought about leasing so I don't have much experience.
I bought my first vehicle in May and never thought about leasing so I don't have much experience.
Posted on 7/29/15 at 1:42 pm to Wtodd
quote:
IF you buy at the end of the lease that's a separate transaction.
Correct which is why you have to pay sales tax on the remaining residual value.
Posted on 7/29/15 at 1:42 pm to Makinbacon
OK without even reading the responses I can tell you you're going to get a bunch of self proclaimed "money savvy" financial wizards on here telling you that leasing is a terrible idea, and at least one person is going to use the phrase "depreciating asset" in reference to an automobile.
Here's the short answer:
If you like driving the newest flashiest car and plan on upgrading every 3 years or so...then leasing is for you IF you don't go over the mileage allowance. You come out ahead compared to buying and trading in every 3 years.
If you view vehicles as purely an appliance to get you from A to B, then save your pennies and buy a good quality 3-4 year old Toyota, maintain it meticulously and drive it until the wheels fall off.
Buying new falls somewhere between, where you want to own the vehicle for a long time in order to spread out the cost, yet you still want to have a nice new shiny car.
...these are general rules of thumb, I'm sure the armchair Warren Buffets will be here shortly with specific examples which contradict these statements, but by and large this is the case.
Here's the short answer:
If you like driving the newest flashiest car and plan on upgrading every 3 years or so...then leasing is for you IF you don't go over the mileage allowance. You come out ahead compared to buying and trading in every 3 years.
If you view vehicles as purely an appliance to get you from A to B, then save your pennies and buy a good quality 3-4 year old Toyota, maintain it meticulously and drive it until the wheels fall off.
Buying new falls somewhere between, where you want to own the vehicle for a long time in order to spread out the cost, yet you still want to have a nice new shiny car.
...these are general rules of thumb, I'm sure the armchair Warren Buffets will be here shortly with specific examples which contradict these statements, but by and large this is the case.
Posted on 7/29/15 at 1:43 pm to VetteGuy
quote:
too many miles for a lease...
Leasing is, 99% of the time, a bad idea anyway.
True Dat. Leased once while ex wife was in law school. she drove very few miles and car was returned in 3 years in excellent shape. Wouldn't recommend lease to anyone who wants to actually get some real use out of a vehicle.
Posted on 7/29/15 at 1:44 pm to CptRusty
quote:
If you like driving the newest flashiest car and plan on upgrading every 3 years or so...then leasing is for you IF you don't go over the mileage allowance. You come out ahead compared to buying and trading in every 3 years.
This is only true if you're the kind of person that buys at MSRP and doesn't haggle with trade in values.
Posted on 7/29/15 at 1:46 pm to CaptainsWafer
quote:
by CaptainsWafer If you plan on keeping a car til it dies, is it better to lease or buy initially?
I really don't think it makes much of a difference, but I'm not an expert
Posted on 7/29/15 at 1:46 pm to AUCE05
quote:
Why would someone buy a Volvo with 180k miles and pay $7500? Geez.
1) Volvos are considered very safe
2) Wouldn't be a bad first car for HS kid.
Posted on 7/29/15 at 1:47 pm to CaptainsWafer
quote:
buy
Why finance the same car twice?
Posted on 7/29/15 at 1:48 pm to Makinbacon
I think you drive too many miles for a lease to work for you. Your monthly payment at 25,000 miles per year would probably approach or exceed that of an outright purchase (assuming 36 month lease versus a 60 or 72 month purchase financed). Your residual value would be so low that the payments would be akin to financing the purchase price over 3 years instead of 5 or 6.
I lease my vehicles but that's because I like driving a new vehicle every 3-4 years and don't mind a monthly payment. Plus the vehicles are always under warranty during the lease term so costly out of pocket repairs are usually just for tires or brakes and routine scheduled maintenance.
At the risk of being TL;DR a lease may work if you drive less than 15,000 miles per year, like having a vehicle under warranty, like driving a new vehicle every couple of years.
I lease my vehicles but that's because I like driving a new vehicle every 3-4 years and don't mind a monthly payment. Plus the vehicles are always under warranty during the lease term so costly out of pocket repairs are usually just for tires or brakes and routine scheduled maintenance.
At the risk of being TL;DR a lease may work if you drive less than 15,000 miles per year, like having a vehicle under warranty, like driving a new vehicle every couple of years.
Posted on 7/29/15 at 1:48 pm to Bmath
quote:
Wouldn't be a bad first car for HS kid.
Wouldn't want my kid in something that might easily break down if the proper maintenance hadn't been performed. I'll be giving my (theoretical) kids hand me downs from the wife and I.
Posted on 7/29/15 at 1:50 pm to LNCHBOX
quote:
This is only true if you're the kind of person that buys at MSRP and doesn't haggle with trade in values.
Thanks Warren.
You can (and should) haggle the capitalized cost with a lease.
As I said, there are scenarios which are exceptions, as is always the case.
Posted on 7/29/15 at 1:51 pm to CptRusty
quote:
Thanks Warren.
Just a fantastic insult.
Posted on 7/29/15 at 1:52 pm to Bmath
quote:
1) Volvos are considered very safe
2) Wouldn't be a bad first car for HS kid.
It's a money pit. If you're going to buy used, go with a Honda or Toyota. Just as safe but without the maintenance headaches.
Posted on 7/29/15 at 1:54 pm to pleading the fifth
One other thing I will add is that a purchased vehicle is never an investment and usually only has value in the last year or so of your financing. Similarly a lease rarely has any value at the end of the term although it is possible to have some equity if your car is desirable and has a higher actual residual value than the lease company anticipated.
I leased mine for 15,000 miles per year, so for a 42 month lease that's 52,500 at end of lease term. I'm currently on pace to have less than 45,000 miles on my vehicle at the end of my term in 9 months. It's possible that I will have some equity (higher residual value) in my lease and can in turn use that money towards the purchase price of another vehicle. I wouldn't count on it if you lease but it is possible.
I leased mine for 15,000 miles per year, so for a 42 month lease that's 52,500 at end of lease term. I'm currently on pace to have less than 45,000 miles on my vehicle at the end of my term in 9 months. It's possible that I will have some equity (higher residual value) in my lease and can in turn use that money towards the purchase price of another vehicle. I wouldn't count on it if you lease but it is possible.
Posted on 7/29/15 at 1:56 pm to LNCHBOX
But lease monthly payments are always less than financed purchase monthly payments.
How can I drive a Maserati?
I can lease it!
How can I drive a Maserati?
I can lease it!
Posted on 7/29/15 at 1:56 pm to LNCHBOX
quote:
Wouldn't want my kid in something that might easily break down if the proper maintenance hadn't been performed.
Unless you are letting your HS kids road trip in their car, why would this be such a huge deal? I had a hand me down as my first car that broke down constantly. I was never more than 10-15 from home, and an easy phone call to get a ride. Sure, that wasn't ideal, but it wasn't terrible either. Besides, cars are getting more and more dependable.
Posted on 7/29/15 at 1:58 pm to Bmath
quote:
Unless you are letting your HS kids road trip in their car, why would this be such a huge deal?
Because I don't want my kid (or myself for that matter) to deal with a broken Swedish car if I don't have to.
quote:
I had a hand me down as my first car that broke down constantly
Is this supposed to help your point?
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