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Post by Deleted on Apr 10, 2011 15:30:49 GMT -5
My wife family is really into leasing: - One cousin leasing a Hummer for her husband, and before that was leasing 2 other cars. - Another leasing a mercedes benz and a Range Rover - Another a BMW
My wife when we were looking at cars last year also wanted to lease. She feels it make sense in the way that : A) you get to drive a new car/model every 3 years if you are into cars. B) you get to get ride of the car before it start giving you any serious problems.
Pretty good points but I don't see the benefits of: A) always having a car payment B) insurance premium always higher because the car is not yours. C) restricted on how far you can drive, and I used my car. I have over 65,000 miles on it and purchased it in May 2008. Most leases only give you about 12,000 miles a year and you pay if you go over.
So?
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phil5185
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Post by phil5185 on Apr 10, 2011 15:52:40 GMT -5
A) you get to drive a new car/model every 3 years if you are into cars. This is the one. If you desire to use only the 'new' 1/4 of every car (36k miles), and are willing to pay for it, leasing works about as well as owning outright. Conversely, if you keep cars for the other 3/4 of their useful lives, it is way cheaper to own. The 'serious problems' isn't really a factor, that doesn't occur until much later. And maintenance items are paid for by the consumer (as they should be) whether or not you incur them directly - eg, when you turn in a car at 36k miles with worn tires, the price of new tires is allocated to your bill.
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gooddecisions
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Post by gooddecisions on Apr 10, 2011 16:29:14 GMT -5
With leasing a new car versus buying a comparable new car, you also get the benefit of lower monthly payments with the lease. So, you could potentially invest that difference in order to come out ahead in the end. You're not really "renting" the car, you're financing the use of the car minus the value you didn't use up.
ETA- you will never come out ahead on a lease when comparing leasing several cars over 10 years versus owning the same one for 10 years.
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Post by debtheaven on Apr 10, 2011 17:31:06 GMT -5
To me? Never. MAYBE if you co is paying for it. Guess what, it's the Next Best Thing here in France now. All the car manufacturers have ads up all over the place about how you, yes YOU! can drive this luxury (whatever) for only (XYZ) per month. I figured they moved their efforts over here because the Americans smartened up on leasing, but who knows LOL. To me it's akin to having a car payment for the rest of your life, and never actually owning the car. Plus, as you say, you have to watch your mileage like a hawk. It's the worst of both worlds, unless you're really into cars. Seems like you're wife is really into EVERYTHING though. Maybe at one point she will have to choose her priorities? My sister's SO's adult kids leased a car for him last year when his old beater died. He knew he was driving it to FL and back (from NY) so he refused to take it out of the neighborhood for the first three months out of fear of going over the allotted mileage. So my sis was driving them everywhere in her old beater while this brand new leased car was sitting in the driveway. Ridiculous. With the money his three kids are spending every month for three years, they would have been better off buying him a relatively recent used car outright. JMO of course.
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april47
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Post by april47 on Apr 10, 2011 17:37:19 GMT -5
If you're going to keep your car forever and have low milage there is nothing better than having a paid for car, except a paid for house. This is really the first time in my life my car is paid for and it is fantastic. If you think you have to trade in every year or two I guess leasing would be OK. I am retired and don't even want a new car.
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Elizabeth
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Post by Elizabeth on Apr 10, 2011 19:04:45 GMT -5
A) you get to drive a new car/model every 3 years if you are into cars. This is the one. If you desire to use only the 'new' 1/4 of every car (36k miles), and are willing to pay for it, leasing works about as well as owning outright. Conversely, if you keep cars for the other 3/4 of their useful lives, it is way cheaper to own. The 'serious problems' isn't really a factor, that doesn't occur until much later. And maintenance items are paid for by the consumer (as they should be) whether or not you incur them directly - eg, when you turn in a car at 36k miles with worn tires, the price of new tires is allocated to your bill. Yes. My grandma leases cars, but she barely drives more than a mile away from where she lives to do all of her shopping so she never has to watch the miles. She likes to have a new model, and she can afford it so it makes sense to her.
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TheOtherMe
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Post by TheOtherMe on Apr 10, 2011 19:35:34 GMT -5
I drive a 1994 Honda Civic. I have driven all of my cars over 100K miles. I will never lease a car.
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cronewitch
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Post by cronewitch on Apr 10, 2011 20:06:40 GMT -5
I would only lease if I only needed exactly what the lease offered. So if I had a job lasting exactly how long the lease was then moving to where I didn't need a car and was going to drive exactly 12K miles a year.
I am a pretty low user at about 8.5K miles a year so my 2007 has just over 17K miles in 2 years and 4 months. If I leased an turned it in after 2-3 years I would have a cherry car worth more than I could buy it for.
It also locks you in to an end date when you must do things like turn it in, buy it or buy a different car. If you are unemployed at the end of the lease so you can't get financing on it or another car you could be in big trouble.
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Post by Savoir Faire-Demogague in NJ on Apr 11, 2011 6:01:02 GMT -5
Leasing is a good way to go broke slowly. You never get out from under a car payment. I did not see it mentioned, many times you may be required to put down a significant down payment when you sign the lease.
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zibazinski
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Post by zibazinski on Apr 11, 2011 6:30:39 GMT -5
DF leases because he gets bored easily and because he puts a lot of miles on his cars. Also, company pays for it just like they do his gas so/insurance so he rides for free.
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Post by Deleted on Apr 11, 2011 6:35:44 GMT -5
DF leases because he gets bored easily and because he puts a lot of miles on his cars. Also, company pays for it just like they do his gas so/insurance so he rides for free. My cousin does the same but he owns the business so he writes off the leasing costs / maintenance / etc as company expense. He is also really into cars and always wants the newer model
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michelyn8
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Post by michelyn8 on Apr 11, 2011 6:40:42 GMT -5
IMO, leasing only makes sense for businesses or individuals who can write off the expense on their taxes. For the average person, its a waste of money. Until I learned the benefit of leasing to a business, I never understood why someone would want to put a few thousand down, make payments of $3-500+ on a vehicle for 3-4 years and then still have to make a large payment to purchase the vehicle at the end of the lease term or turn the vehicle in, pay if they exceeded "reasonable" mileage plus pay a few thousand more for another down payment to start the process again. Aside from renting a home, I can't see making payments on anything that isn't going to eventually become my property.
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zibazinski
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Post by zibazinski on Apr 11, 2011 6:46:37 GMT -5
That's when leasing makes sense but he also leased vehicle number 2, his summer car, which, thank heavens, the lease is up this week as we are moving to a 2 car garage whereas the rental had a 3 car. Even though it's his money and he has plenty of it, blowing it on 3 cars for 2 people is dumb, imho.
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Deleted
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Post by Deleted on Apr 11, 2011 6:47:20 GMT -5
IMO, leasing only makes sense for businesses or individuals who can write off the expense on their taxes. For the average person, its a waste of money. Until I learned the benefit of leasing to a business, I never understood why someone would want to put a few thousand down, make payments of $3-500+ on a vehicle for 3-4 years and then still have to make a large payment to purchase the vehicle at the end of the lease term or turn the vehicle in, pay if they exceeded "reasonable" mileage plus pay a few thousand more for another down payment to start the process again. Aside from renting a home, I can't see making payments on anything that isn't going to eventually become my property. Some leases goes up to $1,000 depends on how much you put down or the cost of the car you are leasing. My cousin is leasing a 2011 Audi A8 fully loaded and I believe he pays close to $1,000 to lease it (yep, not to even own... to LEASE). I believe the price was $946 or something like that. The funny thing is for long business trips, he rents a car (again company expense) so he doesn't go over the mileage or incur extra wear/tear on the Audi. In the end he says it's cheaper to rent a car (while leasing another one) for long business trips.
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Post by Deleted on Apr 11, 2011 8:58:36 GMT -5
At the opposite end of the "when does it make sense" continuum, I leased a car when I was younger and didn't have many options.
My car was totalled in a flood at my apartment complex, so I quite suddenly needed to move to a place that didn't flood and replace my car. I couldn't safely get to my job via bike or public transportation due to the other choices I had made, so I honestly needed a car at that time. Because I was young and dumb and had virtually no savings, I could afford a $249 lease payment each month (w/no down payment, I got a new Civic for that), but I couldn't afford a large down payment on a used car. I also wasn't prepared to pay repair costs for a used car, so driving a new car that I knew wouldn't break down on me was a benefit as well.
So, while on the one hand it was throwing money away to lease that car, the three years of reliable transportation it afforded me gave me a chance to improve my financial position. I now drive a fully paid-for used car and delight in not having a car payment. But I also delight in having an emergency fund because said car has 100k+ miles on it, and occasionally requires some significant repair and maintenance costs.
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Deleted
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Post by Deleted on Apr 11, 2011 9:46:06 GMT -5
I think if you are one of those people that always wants a new car leasing makes sense. My friend's husband trades in his vehicle every year or so.
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Happy prose
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Post by Happy prose on Apr 11, 2011 12:23:04 GMT -5
I lease and love it! This is my 4th leased Accord. I keep it 3 yrs, and the only thing I have to do is change the oil. No worries of breaking down, etc. It may cost a tiny bit more to lease, but well worth the time I save. I'm not really a car person, so it's not that I want the latest cool car out there. I just want to go from A to B with no worries.
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RoadToRiches
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Post by RoadToRiches on Apr 11, 2011 12:28:49 GMT -5
Damn....4th leased car, keeping each for 3 years...that's 12 years worth of payments. I would hate that. I paid my 5 year loan in almost 4 years. I love not having to pay. Cars these days last for long time. Mine is 9 years old and still going strong with 140k miles on it.
Everyone is different I guess, but I would hate to always have that car payment. Not to mention, money down you have to put in on a lease, then any dent, paint chip, you gotta pay for it.
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8 Bit WWBG
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Post by 8 Bit WWBG on Apr 11, 2011 12:34:54 GMT -5
You lease a car when:
1) You can write it off as a business expense.
2) You have need of a car for a finite period of time such that buying is not worthwhile (ex. 6 month assignment).
3) You would rather show off the appearance of wealth, than accumulate wealth itself.
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RoadToRiches
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Post by RoadToRiches on Apr 11, 2011 12:57:52 GMT -5
The math just doesn't make sense to me.
My car was 23k. It's paid off.
If I took a lease out for the same car it would cost me over 60k! The only difference would be that I would be driving 2 new cars instead of mine used.
I am sorry, but I could rebuild my CURRENT car twice for 60k lol To pay almost 40 grand just to drive a new car is crazy.
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tractor
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Post by tractor on Apr 11, 2011 13:34:31 GMT -5
My dad has always leased a car. He has had a car payment for almost 45 years now. Crazy. I've never understood it. Leasing isn't for me anyway, I put over 40,000 mile a year on my car, and a few more on my truck. The truck has been paid for for several years, and the car loan is at 0% so I fully intend to drive it into the ground over the next 5 years or so. Of couse by then it will have almost 300,000 miles on it (just like my truck).
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tloonya
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Post by tloonya on Apr 11, 2011 14:20:29 GMT -5
It is awesome to not to have payments for car. I am petrirfied thinking of passing of my car...
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cronewitch
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Post by cronewitch on Apr 11, 2011 16:07:40 GMT -5
I lease and love it! This is my 4th leased Accord. I keep it 3 yrs, and the only thing I have to do is change the oil. No worries of breaking down, etc. It may cost a tiny bit more to lease, but well worth the time I save. I'm not really a car person, so it's not that I want the latest cool car out there. I just want to go from A to B with no worries. It may cost a tiny bit more to lease. Please show your math. It seems it would cost a very much more. What has driving 12 years of Accords cost compared to what you would have spent just buying one the first year and keeping it. Also compare to buying one every 6 years and selling the used one. You can assume some things are the same like insurance and oil changes and gasoline.
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garion2003
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Post by garion2003 on Apr 11, 2011 18:51:57 GMT -5
I bought a new car - it's 3 months from being paid off! Having lived with a car payment these past few years, I really want to avoid that in the future. For me, a paid off car is better then driving the newest model every 2 years.
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RoadToRiches
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Post by RoadToRiches on Apr 11, 2011 19:06:05 GMT -5
lol Rick.. sorry to laugh but the way you wrote it...I can just picture a guy walking in the dealership lol
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RoadToRiches
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Post by RoadToRiches on Apr 11, 2011 19:21:27 GMT -5
my ex-gf would always lease cars. She was ALWAYS paying for miles or something else she had to fork out money on, dents, used tires, scratch here and there. I would always tell her why the hell do you lease? Finally, she bought a car and she said she can't believe she was leasing before. It's like you always have that car payment and nothing left at the end.
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thyme4change
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Post by thyme4change on Apr 11, 2011 19:40:15 GMT -5
Can you define "tiny"?
That said - I have a leasing story that made financial sense.
I needed to buy a car that had more seats (damn babies and their stupid car seats!) My husband was in law school and was going to finish up in 14 months, at which time he would go from being a cost center to having income. Worst case scenario, he would have been a SAHD and saved us $12k per year in daycare - but I was confident he would at least get some job. The only debt we had was a mortgage and lived below my income. We searched for 5 months for a used Accord, and found that 3 year old Accords cost about $3000 less than brand new accords. We also couldn't find any bottom of the line used accords - only ones with added features. We had enough to pay cash for the car, but it would have drained about 2/3rds of our savings (and I was pregnant, and we had a baby, and we had one income.) Rates on loans for used cars were about 5.5%.
The lease rate was 1.9% The car was the previous years model. We bought in June of 2003, and we have a 2002. The lease payments were very low. We bought out the car at the end of the lease. We still have the car, and probably will for another 10 years - maybe more. It only has 55k miles on it.
We paid about $800 in interest over those 3 years for the "safety" of not draining our account. Had we bought a used one for $2500 less, but a 5.5% rate, we would have paid about 3 times that in interest, BUT, we would have had payments that were $100 higher. So, in the end, I figure it cost us about $1000 to lease a new car vs. buying a 2 or 3 year old used version of the same car.
I'm glad we did it.
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formerexpat
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Post by formerexpat on Apr 11, 2011 20:46:06 GMT -5
Some would say it's much cheaper leasing a hummer rather than getting married.
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RoadToRiches
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Post by RoadToRiches on Apr 11, 2011 20:54:38 GMT -5
Speaking of Hummers...I think couple years ago...some Men Magazine voted it the #1 douche car. No joke lol
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Post by Deleted on Apr 11, 2011 20:55:20 GMT -5
Leasing must make economic sense sometimes. I am temping at a company that uses nothing but leased trucks, owns few or none of them, and several hundred trucks are involved. I am still trying to figure that one out. The only thing I can imagine is that it helps them get a replacement fast if one breaks. I am trying to figure that one out for my job but for them it's leased buildings. They have over 126 locations between 6 states and besides the corporate office and a few buildings (I think it was 5-6 last time I was working on the fixed assets) they lease all the others. I asked our CFO and VP of Operations why not buy them, they all them me the same: make more financial sense to lease them. I guess business wise it does but in my head I don't see why you would want to lease a building when you can own it. I guess I need to dissociate with that part of me that wants to own real estate some day and see it from their business view.
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