Is there anything smart about auto leasing? | TigerDroppings.com

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goldennugget
South Carolina Fan
Bias Monitor
Member since Jul 2013
6604 posts

Is there anything smart about auto leasing?


Keep hearing ads for a company in DFW called Smart Auto Leasing and how smart auto leasing is.

I just don't see how auto leasing, in any way, is smart.

Can someone perhaps fill me in here? I am not trying to make a point here and boast about how I am anti-auto leasing, I just want to know how it is a smarter option than other methods such as paying straight cash or even financing.







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jimbeam
USA Fan
University of LSU
Member since Oct 2011
30389 posts

re: Is there anything smart about auto leasing?


If you know you will want a car every few years

I don't, so I won't lease






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Tigerpaw123
USA Fan
Louisiana
Member since Mar 2007
9148 posts

re: Is there anything smart about auto leasing?


sure, it allows you the opportunity to drive a more expensive car than you could normally afford, that you gain no equity in, have to be very careful about the miles you put on it, and you have nothing when it comes time to renew lease, and are forced to get renew lease or get a new vehicle on their time line vs yours


and before someone claims it is better for a business to lease than buy, not saying that there are not times that may be true, but most often the same tax benefit would be there regardless of lease vs purchase






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Ace Midnight
LSU Fan
Ball, LA - Home, Sweet Home
Member since Dec 2006
29250 posts

re: Is there anything smart about auto leasing?


quote:

financing


Leasing is a way of financing, if you want to think of it that way - you pay a chunk (normally) to drive away, potentially lower payments than through a financed purchase and you walk away from the residual value at the end.

I does make sense to people who want to drive new cars for 36 - 48 months then trade up. They don't have to worry about negotiating their trade value, and the only real hits they take is the big payment up front (or, potentially high monthly payments - one of them will be out of proportion compared to purchase financing) - essentially prepaying the depreciation they are willing to incur to drive a new car every 3 to 4 years - and having to be in the new car market every 3 to 4 years.

It does not make sense if you like to find good condition, lightly used cars, at a good price and drive them for years and years (like me.)

But, it's not financially crazy for the suitable market, described above. Unfortunately, for a while there, it was a vehicle (sorry, a "method") to get people with good credit scores into cars they couldn't afford. That has settled down, some.



This post was edited on 9/10 at 1:52 pm


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kywildcatfanone
Kentucky Fan
Wildcat Country!
Member since Oct 2012
16372 posts

re: Is there anything smart about auto leasing?


They push leasing because they make more money on it.
I suppose someone who wants a new car every 2 years would see leasing as a benefit, but I would not pour my money down that hole, ever.






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Slickback
New Orleans Pelicans Fan
Deer Stand
Member since Mar 2008
26011 posts
 Online 

re: Is there anything smart about auto leasing?


I know people that will always have an auto loan. They never put any money down, therefore are always upside down on the vehicle and replace it before they have it paid off. I don't condone this type of reckless financial behavior, but for that one particular person, I think leasing is no less a worse decision than buying/financing.





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goldennugget
South Carolina Fan
Bias Monitor
Member since Jul 2013
6604 posts

re: Is there anything smart about auto leasing?


I persoanlly buy reliable used cars with cash, but that is just me.

Leasing to me just seems as financing the depreciation value, but that value can be arbitrary. With leasing, it seems to be about the payment amount, but even with a low payment you could still be getting ripped off because if the payment is $250, times 36 months thats $9,000. But what if the depreciation is only $7,000? You are getting ripped off for $2,000.

Also that doesn't include milage overages, or gap insurance.






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Beerinthepocket
LSU Fan
Dallas
Member since May 2011
572 posts
 Online 

re: Is there anything smart about auto leasing?


Say you are getting a $100k BMW 750li, and deciding between leasing and buying.

The pros of leasing are:
-not having the large capital outlay at the start. If you think you can make more in in your investments of that $100k in 3 years of paying a lease (prob $35kish in lease payments) it makes sense not to buy.
-not having the risk of losing the equity value in the car in the event of a wreck. A $100k car could become worth $50k instantly in the event of a wreck (even after repairs are paid for by insurance).
-if for a business there can be tax advantages.

Cons:
-if you typically drive a car for 10 years before getting a new vehicle it doesn't make sense.
-you have no equity in the vehicle.
-mileage can be an issue if you drive more than 15k miles in a year.

Everyone's situation is different, there are situations in which buying makes sense and others in which leasing does.






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Tigerpaw123
USA Fan
Louisiana
Member since Mar 2007
9148 posts

re: Is there anything smart about auto leasing?


quote:

-if for a business there can be tax advantage


how are they any different than buying???






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reb13
Ole Miss Fan
Oxford, MS
Member since May 2010
9851 posts

re: Is there anything smart about auto leasing?


Expense vs capitalizing it. I am also going to add a pro that if you don't want to deal with cars going out of warrant leases are appealing.


This post was edited on 9/10 at 8:09 pm


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756
LSU Fan
Member since Sep 2004
9540 posts

re: Is there anything smart about auto leasing?


very few people will tell you leasing is a good idea

best advice

don't lease






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Tigerpaw123
USA Fan
Louisiana
Member since Mar 2007
9148 posts

re: Is there anything smart about auto leasing?


quote:

Expense for capitalizing it.


Versus the company purchasing the car and it being a business expense?..






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reb13
Ole Miss Fan
Oxford, MS
Member since May 2010
9851 posts

re: Is there anything smart about auto leasing?


Sorry I meant expense VS capitalizing.





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jso0003
Auburn Fan
Birmingham/Atlanta
Member since Jun 2009
4791 posts

re: Is there anything smart about auto leasing?


There are a few exceptions where leasing makes sense, and usually then it is only because there is some perverse tax incentive, been seeing this a lot with Volt and the Tesla Model S...

Bottom line: In rare circumstances the numbers work, but generally not.






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LSUtigerME
LSU Fan
Walker, LA
Member since Oct 2012
568 posts

re: Is there anything smart about auto leasing?


Leasing can be beneficial if you drive fairly low mileage, and want to buy a new car every 3-5 years. It's not the most financial savvy decision since you will always have a car payment and will never build equity. However, you'll also be driving a new car more often, and, from a monthly payment only perspective, a more expensive car than you could typically afford. You are basically financing the depreciation, or simply paying for your use of the vehicle.

Each situation should be reviewed carefully and honestly. It can often make sense if certain conditions are understood.

Own vs Lease Thread






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756
LSU Fan
Member since Sep 2004
9540 posts

re: Is there anything smart about auto leasing?


said like a true car salesperson





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Will Cover
Washington Fan
Whiskey Dick Mountain, WA
Member since Mar 2007
24602 posts
 Online 

re: Is there anything smart about auto leasing?


You owe something, but you own nothing.





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TejasHorn
Texas Fan
High Plains Driftin'
Member since Mar 2007
3429 posts

re: Is there anything smart about auto leasing?


Sure.

If you don't drive over 15K, like getting a new car every three years and staying under warranty, and want a lower payment it often makes sense.

The last few years its made less sense as the used car market got red hot... Meaning good equity if you buy (and properly maintain) instead.

There are a large number of people who lease and most are aware the positives and negatives.






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BestBanker
New Orleans Saints Fan
stuck in a moment
Member since Nov 2011
3122 posts

re: Is there anything smart about auto leasing?


I am curious just for curiosity's sake:

How many of you that have posted a reply own a business or interest in a business?







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