re: Want to lease a luxury car with $450 vehicle allowance, but my wife says get a used car

Car allowances are taxed. Plus you have to pay the depreciation and maintenance out of the allowance. You need to be thinking more like a 2010 Civic. Last time I had a car allowance it was $650 and that was 18 years ago.

frick your wife, literally. Then get a GT4 and smash some young strange.

OT ball or go home

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Never lease

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Why?

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I do not know how we could afford to buy that new!

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Leasing a car to afford a car you can't afford seems like a smart idea. I don't know how the dealerships even survive.

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How does the OT respond to the Car Guy?

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Mid 40’s, no kids, and he’s worried about springing $50/month for a vehicle ($500 lease - $450 allowance)?

Is the $450 suppose to cover gas, insurance, miscellaneous expenses such as tires, and maintenance items including oil changes & tire rotations?

I would look at my total operating cost for work related activities.

- fuel if not covered
- parking and tolls if not covered this adds up
- vehicle insurance
- vehicle maintenance if it is not covered

Then make a decision from my total estimated cost with inflation added for operating the vehicle for work.

I did not mention personal use as that is on you.

This kia commercial is a reality for you as $450 not that much money.

“Do you have $99 down and make x dollars a month. If so we got the Kia for you! “

And the companies that I worked for that gave a car allowance, had limitations on year or the car + mileage + 4 doors and it was a point value system. Older cars wouldn't work

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On the lease you are getting the car at sticker price. When buying you are negotiating below sticker price.

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No. You negotiate the price of a car in a lease just as you would in buying. Actually the word “lease” doesn’t even need to come up until you’ve agreed on the price of the car.

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But if he buys the car, he can drive it until the wheels fall off, and eventually bank that monthly payment

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This really depends on the stipulations on the vehicle allowance. Unless this is just some mom and pop operation, this is likely run through a service, like Car Data. For the full allowance, they'll require the vehicle to be no more than a certain number of years old (I'm sure this varies by employer, but my experience was the vehicle had to be 5 or fewer years old for the full amount). The allowance declines each year after the 5 year age threshold until the vehicle ages out and is no longer eligible for the program.

Employers provide an allowance because they want employees to have reliable transportation, don't want the overhead of maintaining a fleet, and don't want to pay IRS standard mileage rates.

For these situations, buying new is completely out of the question, for me. The vehicle depreciates considerably the moment you drive it off the lot and you are going to have to get another new vehicle in a few years to maintain the full allowance. The only way new makes any sense is if you are planning to pass the vehicle to your spouse or child.

Leasing is probably the easiest solution, from a hassle perspective, since you don't have to worry about selling or trading in the vehicle at the end of the lease.

My preference is to get the newest model year used vehicle within the allowance budget, with fuel economy being near the top of the priority list. It's been a while since I had first hand experience with a vehicle allowance, but they paid something like .11/mile when the IRS rate was something like .55/mile.