Sanity Check - Kioti

[nards444]

You must be leasing cheap stripped down trucks with those payments of $450-$500 with no money down.Maybe I should redo my math then.When I looked into leasing with.$4,000-$5,000 down payments were still $600 plus per month on a 36 month lease.

No I would say middle of the road Ford's and Chevy, basically XLTs and LTs minus leather and sun roof, so your talking your high 40s to mid 50s MSRP trucks, All depends on time of year and shopping around too, never pay over invoice and shop multiple dealers. But if your talking loaded out Lariats and LTZ then sure, but the alternative is paying 800-900 per month for 84 months on those bad boys if you buy them. Rams got monster deals right now FWIW

Current lease started last AUG. Think the leased amount was right around $17k on a 54k MSRP truck I paid 48 for the truck. Split in 36 payments im actually at like 489 or something. Vs buying it at 60 months with 2.99% would have been 850 a month or 650 a month for an 84 month term, yeah no thanks.

PS no sense in down payments on a lease really, like I said earlier crash and total that truck day two its gone. Because of residual at least over the time frame of the lease so lets say three years your financing dollar for dollar cheaper then three years on a conventional loan, if that makes sense. Now of course your paying for something you never own and have to think about miles as every 1000 you go over is $250, but I know how many miles I drive which is never more than 13 or so a 15k mile lease has never been an issue

A lot of it is understanding residuals and what you are leasing, typically cars and cheap brands the lease amount per month sounds good but what you are actually paying for dollar for dollar is terrible. I don't know much about yota or titan, but the big three residuals on trucks are usually pretty good making what you paying dollar for dollar pretty good. Were in the middle of pricing an suv for the wife and we prices traverse on lease, my truck actually cost 12k more but leases out a ton better and over 3 years would end up paying 4-5k less on a truck vs that traverse.

 

[coobie]

No I would say middle of the road Ford's and Chevy, basically XLTs and LTs minus leather and sun roof, so your talking your high 40s to mid 50s MSRP trucks, All depends on time of year and shopping around too, never pay over invoice and shop multiple dealers. But if your talking loaded out Lariats and LTZ then sure, but the alternative is paying 800-900 per month for 84 months on those bad boys if you buy them. Rams got monster deals right now FWIW

Current lease started last AUG. Think the leased amount was right around $17k on a 54k MSRP truck I paid 48 for the truck. Split in 36 payments im actually at like 489 or something. Vs buying it at 60 months with 2.99% would have been 850 a month or 650 a month for an 84 month term, yeah no thanks.

PS no sense in down payments on a lease really, like I said earlier crash and total that truck day two its gone. Because of residual at least over the time frame of the lease so lets say three years your financing dollar for dollar cheaper then three years on a conventional loan, if that makes sense. Now of course your paying for something you never own and have to think about miles as every 1000 you go over is $250, but I know how many miles I drive which is never more than 13 or so a 15k mile lease has never been an issue

A lot of it is understanding residuals and what you are leasing, typically cars and cheap brands the lease amount per month sounds good but what you are actually paying for dollar for dollar is terrible. I don't know much about yota or titan, but the big three residuals on trucks are usually pretty good making what you paying dollar for dollar pretty good. Were in the middle of pricing an suv for the wife and we prices traverse on lease, my truck actually cost 12k more but leases out a ton better and over 3 years would end up paying 4-5k less on a truck vs that traverse.

Leased 1 time back in 2002 chevy 1500.That was enough for me I put on to many miles and don"t like the leasing terms.I buy new now and pay cash.To each his own that,s what makes the world spin around.

 

[nards444]

Leased 1 time back in 2002 chevy 1500.That was enough for me I put on to many miles and don"t like the leasing terms.I buy new now and pay cash.To each his own that,s what makes the world spin around.

Cash buyer and do to many miles then you would be correct lease isn't the way to go, even if I went over by 10,000 miles in three years that only adds 69 a month to my lease, still not that big of a deal. Although with the stock market how it is and interest rates still relatively low on auto loans, better of financing and using the cash to invest . Billionaires even take out loans because they make more money not using their own money and us their own money to invest. Even with the crap market this past fall my 401 still hauled in 8% over the last year, better off with an auto loan at around 3% and making 4-5% with my money

Either way nice car I got a 15 scat pack.

 

[coobie]

Cash buyer and do to many miles then you would be correct lease isn't the way to go, even if I went over by 10,000 miles in three years that only adds 69 a month to my lease, still not that big of a deal. Although with the stock market how it is and interest rates still relatively low on auto loans, better of financing and using the cash to invest . Billionaires even take out loans because they make more money not using their own money and us their own money to invest. Even with the crap market this past fall my 401 still hauled in 8% over the last year, better off with an auto loan at around 3% and making 4-5% with my money

Either way nice car I got a 15 scat pack.

Retired and still making $$ off our investments.No worries on this end.

 

[paulfun9]

My numbers add up if your talking the averages, averages are 12-15k miles a year, if you are the average you have almost 200k miles on your vehicle in which case you should have more than one set of tires and some brakes. My math doesn't take into account the odds and eachs or the guy that is only driving 2-3k miles a year. Also your talking about a truck that you purchased in 2003 which means it probably didn't cost over 30k and 0% interest rates, which i am comparing trucks that for the most part have been 40-50k for the last 5 years and 0% interest rates have all but disappeared in the last few years and your paying 3-5% for now.

My equation works if you hold on to the vehicle for 7 -10 years only and drive the average amount of miles a year and are comparing like vehicles with like purchase prices and comparing stuff in the last 5-10 years not almost two decades ago. If you purchase something to drive for 20 years and a million miles renting is a terrible idea.

And cost per mile vs cost per year can be one in the same or relevant. But when you talk cost per mile your also factoring in MPG, insurance etc which makes it a different ball game, again we are talking purchase price only.

So while I see where you are coming from and it probably works for you, but when comparing two things they have to be the same or similar, of which you are not doing. If we both started fresh today and both went and bought like trucks with like usage, I guarantee I either match or beat you for the next ten years in terms of purchase price only. Again people arent keeping vehicles 20 years data supports that, so your situation is not the norm.

First of all I pay cash so it doesn稚 matter to me what the interest rates are.
Secondly you assume that I only purchased one set of tires but I actually used a nice round number of 1000 dollars for each set the truck took since new right up to the last set which should have given you an advantage but it didn稚. Understand that even the tires last purchased didn稚 come close to a thousand dollars.
I also didn稚 look at my purchase price only the cost of maintenance items and break downs to see if your formula was correct.
Even at the exaggerated cost of the tires it didn稚 get anyplace close to the 10,000 difference you need to cover and there was an extra 6 years in my formula. Even with the battery that I think it will soon need we are not close.
You also don稚 need to take into account fuel used if you want to figure cost per mile to get a real comparison on the difference between a lease or purchase.


Now to your credit I do have one friend who has purchased and traded every 3 to 4 years since he was 18 years old. I can稚 understand for the life of me why he doesn稚 just lease as when I last did the averages on his spending I believe he gave away over 100,000 maybe a bit more.

 

[nards444]

First of all I pay cash so it doesn稚 matter to me what the interest rates are.
Secondly you assume that I only purchased one set of tires but I actually used a nice round number of 1000 dollars for each set the truck took since new right up to the last set which should have given you an advantage but it didn稚. Understand that even the tires last purchased didn稚 come close to a thousand dollars.
I also didn稚 look at my purchase price only the cost of maintenance items and break downs to see if your formula was correct.
Even at the exaggerated cost of the tires it didn稚 get anyplace close to the 10,000 difference you need to cover and there was an extra 6 years in my formula. Even with the battery that I think it will soon need we are not close.
You also don稚 need to take into account fuel used if you want to figure cost per mile to get a real comparison on the difference between a lease or purchase.


Now to your credit I do have one friend who has purchased and traded every 3 to 4 years since he was 18 years old. I can稚 understand for the life of me why he doesn稚 just lease as when I last did the averages on his spending I believe he gave away over 100,000 maybe a bit more.

You did claim you got 0%, and I was only pointing out that 0% doesn't exist anymore. The example I gave was a 5k difference not a 10 that I was trying to cover, but if your talking the 10k in equity that he might have thats really a factor on the next purchase not the initial 10 years in the example, we would have to do a 20-30 year. Either way your trying to compare a truck that was bought 16 years ago for probably 25k vs a truck that now cost 50k, your comparison into this situation just doesn't work, nor was I trying to compare to that. My comparison was two trucks bought for the same money in 2018-2019 with the same usage and the cost of ownership spread across 10 years, again the average length an American keeps a car is 6-7 years, so Im not even going to try to compare it to what you are doing. Plus I would like to see how many miles a year you put on that truck.

Second if I go back to my example of my buddy he paid 55 I paid 60, and we both drove 15k a year for 10 years, per mile I pay 40 cents a mile and he paid 36 cents. Lets not talk gas insurance etc, as that's relatively inherent costs with no use discussing. I pay 4 cents more a mile or 600 more a year, lets just say for a second my buddy has absolutely no maint cost for 10 years, I will gladly pay 600 more a year for 10 years to be into a new truck. But reality is he will have some maint cost over 10 years, those miles alone dictate he will need tires twice, which I don't know what tires your buying but around here your talking 1200-1500 a set, mounted. But even if we go with your number of 1000 a set that bumps up his cost to 38 cents per mile compared to my 40 cents a mile, again Ill gladly pay 2 cents more a mile or 300 a year to always be in a new truck. Reality is after 10 years it will be a wash one way or other, he benefits by maybe not having a payment for a year or two out of that ten years and not worrying about miles and possibly having some equity down the line. I benefit from never having to fork over for maint, always being in a new truck and maintaining a relatively consistent payment, best of all in 2-3 years the truck is somebody elses problem. End of the day really is wash, one way benefits some depending on circumstances the other does others.

You are right if your buying every two or three years, you are better off leasing.

 

[paulfun9]

I used your 50,000 as the cost of the truck to do my cost not what I paid for it 16 years ago.
What I found today is that my auto policy would be more with a lease than it is as an owner. Unsure of why but my local insurance agent said they almost always pay more with a lease. So we would now need to add that cost difference to things.
He also explained to me the cost of turning something in after the lease term with dings, dents, scratches or even a stain from accidentally spilling something. So now we need to add to this the cost of fixing every little thing as it happens or paying for it at the end.
So far no matter how I look at this or who I ask including people who currently lease and those who did but don’t anylonger I seem to get the same answer. Stay away from the lease unless you are the type that wants a new car every 2 or 3 years, plan to buy it outright at the end and are getting a deal on the lease to begin with (the claim from his person is it made the car more affordable this way as they couldn’t handle the financed cost now but will be at the end of the lease) (didn’t really make sense to me but didn’t wait for a full explanation) and someone who as you do claimed the cost is the same even with me paying cash but cautioned me against it due to my erratic mileage needs.

I really wanted to get a better understanding of a lease as I have never had one. In the end for me I doubt it would be a fit for me as I have a tendency to keep things forever or at least till I run out of room and honestly don’t generally finance things to begin with.

 

[nards444]

I used your 50,000 as the cost of the truck to do my cost not what I paid for it 16 years ago.
What I found today is that my auto policy would be more with a lease than it is as an owner. Unsure of why but my local insurance agent said they almost always pay more with a lease. So we would now need to add that cost difference to things.
He also explained to me the cost of turning something in after the lease term with dings, dents, scratches or even a stain from accidentally spilling something. So now we need to add to this the cost of fixing every little thing as it happens or paying for it at the end.
So far no matter how I look at this or who I ask including people who currently lease and those who did but don’t anylonger I seem to get the same answer. Stay away from the lease unless you are the type that wants a new car every 2 or 3 years, plan to buy it outright at the end and are getting a deal on the lease to begin with (the claim from his person is it made the car more affordable this way as they couldn’t handle the financed cost now but will be at the end of the lease) (didn’t really make sense to me but didn’t wait for a full explanation) and someone who as you do claimed the cost is the same even with me paying cash but cautioned me against it due to my erratic mileage needs.

I really wanted to get a better understanding of a lease as I have never had one. In the end for me I doubt it would be a fit for me as I have a tendency to keep things forever or at least till I run out of room and honestly don’t generally finance things to begin with.

Everybodys situation is different, But my only point was comparing methods and really running numbers may benefit some people or at least financially be a wash. Everybody's got opinions including banks, car dealers, and agents. Just the way the world works. Everybody needs to think of purchase price, cost to own and maintain, and what does this purchase mean 5-10-20 years down the road. I find the way people buy cars is a lot like oil or what battery to buy, people swear by what they do and will not see anything different. Some say cash only, I say if your well off enough to drop 50k go for it but myself Id make more money using somebody elses money, some say loans because of miles etc etc, which fits for some people, some people say leasing only, but I say be careful what you wish for. In my mind though leasing is no different than taking a loan out short of the miles, on a loan its not yours until its paid off.

I will tell you from my experience, I actually owned a 15 F150 that I got rid of and got back to leasing for my 18 ford, the 18 is actually $8 cheaper per month in insurance. Also we have never paid anything at the end of the lease for damage, but we also take care of our stuff. But damages to something you own will cost you anyways, you'll either fix it and pay for anyways or you'll pay for it in depreciation, unless you keep something forever until its not worth anything anyways.

I just go back to purchasing a truck today is much different than 20 years ago, having to cough up 50 or throw down 7-800 a month for 5-7 years is a pretty big decision. Ive just chosen to cough up the 50k over 7-10 years and always be in new, in doing so which has some upsides and a few down as well. If you dont fit the averages then leasing probably isn't for you. End of the day if you fit the averages in terms of use and what not, most if it will be wash, just depends on how you want to get there.

 

[rScotty]

For the person like myself who tends to choose carefully and keep things forever, there is one argument in favor of leasing that I hadn't considered....

It is that a lease can be considered an extended trial period & without restrictions. Better than rental, since with leasing I know the vehicle history since new, and at the end of the lease I am in an excellent bargaining position to buy it and keep it.

And if I didn't, then I'm in an equally good position to try something else.
rScotty

 

[nards444]

For the person like myself who tends to choose carefully and keep things forever, there is one argument in favor of leasing that I hadn't considered....

It is that a lease can be considered an extended trial period & without restrictions. Better than rental, since with leasing I know the vehicle history since new, and at the end of the lease I am in an excellent bargaining position to buy it and keep it.

And if I didn't, then I'm in an equally good position to try something else.
rScotty

Yes this is another point, its not always the case though. Typically high residual vehicles are pricey to buy at the end, unless you got a super deal or a lot off up front. But there are situations where leasing and then buying that are quite advantageous. But like you said if its not, then 3 years down the road its no longer your problem.