Sanity Check - Kioti

[prof fate]

IN the end there isn't much difference..IMO the lease is riskier.

With a lease you pay for what you use - 2 years of of car and the miles. It appears cheaper sometimes, but often you don't get to negotiate the price like you do when buying - you CAN, but many won't do that. They assume you're a 'payment buyer' and sell you on the low payment.

You must keep the car in good condition and it must be good (brakes, tires, etc) when you turn it in. And you're restricted on miles or you pay a serious premium per mile if you go over. Maybe you're life is guaranteed...mine is not. I went from 10k miles a year to 16k miles a year after an unexpected divorce, job change and new girl friend.

It sucks to put new tires on a car and then turn it in.

And sure, you can 'change vehicles' in 2 years...but you can ALWAYS change vehicles anytime you want - unless you lease, then you have to wait till the end of the lease or pay a penalty.

So you're not upside down...yeah, but you have no equity-ever-either.

And at the end of the lease you have no car...unless you lease again or buy it or buy somethign else. You 'buy' a car and you own the car -[ make the payments, regardless of your job or income or credit rating and you own it as long as you want. You won't be walking cause you had a credit issue, job change, etc.

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

 

[prof fate]

I understand what you are saying about working on older vehicles but the facts are not on your side about longevity. Cars today last longer than the cars from the good ole days.
Cars now last longer than ever -- will yours? - CBS News

Friend bought a tesla model 3. Titanium frame, aluminum body and when was the last time you wore out an elec motor? He says a battery change is $8k..so you drive it 5, 10 years, like a normal car, except you save $2-3 a year in gasoline/oil changes and even brakes last longer, then you put 8k into the batts. On a typical car after 5-10 years you're buying another car - and 8k won't buy a great used car.

My next car will be elec...tesla or somethign else I don't know yet. More are coming on the market all the time - volvo (polar something), ford, audi, GM, nissan right now today.

 

[nards444]

IN the end there isn't much difference..IMO the lease is riskier.

With a lease you pay for what you use - 2 years of of car and the miles. It appears cheaper sometimes, but often you don't get to negotiate the price like you do when buying - you CAN, but many won't do that. They assume you're a 'payment buyer' and sell you on the low payment.

You must keep the car in good condition and it must be good (brakes, tires, etc) when you turn it in. And you're restricted on miles or you pay a serious premium per mile if you go over. Maybe you're life is guaranteed...mine is not. I went from 10k miles a year to 16k miles a year after an unexpected divorce, job change and new girl friend.

It sucks to put new tires on a car and then turn it in.

And sure, you can 'change vehicles' in 2 years...but you can ALWAYS change vehicles anytime you want - unless you lease, then you have to wait till the end of the lease or pay a penalty.

So you're not upside down...yeah, but you have no equity-ever-either.

And at the end of the lease you have no car...unless you lease again or buy it or buy something else. You 'buy' a car and you own the car -[ make the payments, regardless of your job or income or credit rating and you own it as long as you want. You won't be walking cause you had a credit issue, job change, etc.

If your not negotiating on a lease then your wrong, its no different than buying a car, the final number comes out after you have lowered the final cost. As far as miles avg american does 12k a year and they have 15k mile leases and not just two years you can go three.

Also maintenance new brakes or etc is a sunk cost either way, tbh Ive only replaced brake pads on one of our leases and we are on lease 6 or 7. Buy a brand new vehicle and not keep it nice, Id say why are you buying a brand new vehicle.

A lot of people dont own there cars anyways, so what does it matter what bank it goes to in my mind. No different to have a loan on it for 5-6-7 years and turn around and trade it in and starting over.

Just to give you an idea my 18 F150 final priced at 48k I leased out 15k miles a year for 500 a month for three years, to buy it would have cost me 640 bucks a month for 7 years(3 year term would be 1395), both examples were with 0 down. Mileage is 20 cents a mile if I go over my 45k limit in 3 years. So in three years for mileage overages to kick in the truck would have to surpass 45k total miles. With that said I would have to drive around 70k miles in three years or 23k a year in order for it to start costing me more money on the lease then it would have been to buy the truck outright during that three year period.

Leasing is not for everybody nor does it work out for the guy that buys the truck and keeps it 15 years or the guy who maybe buys bottom trim no frills although even no frills trucks aren't cheap anymore. The problem is people like anything else see things in two colors only and dont really understand the true or full picture of things. I know people that are dead set against car loans and wont do them and are proud to own their car outright, but then have credit card debt, home eq, or 401k loans out the butt to make up for it and live paycheck to paycheck. Sometimes borrowing responsibility can keep people on an even keel, problem is like you said people get the per month mentality. Even billionaires borrow money because their money can make them more money and frankly can be used to be spent on things they want. All about balance. Got cash great, better to pay for things without interest. Reality is in todays world it is very hard to do

 

[prof fate]

Well, it's new for 10 minutes. After that it's used. 3 years later...leased or not it's 3 years old/used. Some people wash their cars often, some do not. I do it 3 times a year or so whether it needs it or not.

If you turn in a lease with too low brakes or tires you're gonna be charged for it. Granted, if you owned it you'd need to put brakes on too, of course. But to be charged for tires that you'll never use sucks. If you own the car you can use the tires you just bought.

A lot depends on how often you change out cars...My pattern has been at about year 10 or 11 I change cars..i'm racking up a few more miles now so we'll see if that pattern holds up. I've bought new and i've bought 2-3 year old (1/2 the price of new, or used to be). My current car is a 2014, 81k miles, bought new, paid off last year. I hope to keep it 5 more years..150k miles or so, 10 years. I should be worth what, 3k then? So I paid 24k for 10 years, plus any repairs (mtce like brakes and such you pay regardless).

Dollar per mile cheaper than a lease.

BUT many folks trade in before they've paid off or just when they make that last payment..doen that in the past myself. 3 months of no payment and go get a new car again. In that case a lease might make sense.

A friend started leasing, in 2009 he got a steal on a camry - nobody was buying cars in the recession. he extended it (179.month , why not?) btu then he had sticker shock and ended up with a sentra for 219...he wasn't pleased but liekd the 'reliability of having a new car' so he's paying the price for that 'reliability'.

Yes, you CAN negotiate on a lease deal - MOST people do not. 20% of buyers don't negotiate at all, and its much higher with lease deals.

When I bought my 14 the interest was 1.2% on the loan..hard to beat that.

If your not negotiating on a lease then your wrong, its no different than buying a car, the final number comes out after you have lowered the final cost. As far as miles avg american does 12k a year and they have 15k mile leases and not just two years you can go three.

Also maintenance new brakes or etc is a sunk cost either way, tbh Ive only replaced brake pads on one of our leases and we are on lease 6 or 7. Buy a brand new vehicle and not keep it nice, Id say why are you buying a brand new vehicle.

A lot of people dont own there cars anyways, so what does it matter what bank it goes to in my mind. No different to have a loan on it for 5-6-7 years and turn around and trade it in and starting over.

Just to give you an idea my 18 F150 final priced at 48k I leased out 15k miles a year for 500 a month for three years, to buy it would have cost me 640 bucks a month for 7 years(3 year term would be 1395), both examples were with 0 down. Mileage is 20 cents a mile if I go over my 45k limit in 3 years. So in three years for mileage overages to kick in the truck would have to surpass 45k total miles. With that said I would have to drive around 70k miles in three years or 23k a year in order for it to start costing me more money on the lease then it would have been to buy the truck outright during that three year period.

Leasing is not for everybody nor does it work out for the guy that buys the truck and keeps it 15 years or the guy who maybe buys bottom trim no frills although even no frills trucks aren't cheap anymore. The problem is people like anything else see things in two colors only and dont really understand the true or full picture of things. I know people that are dead set against car loans and wont do them and are proud to own their car outright, but then have credit card debt, home eq, or 401k loans out the butt to make up for it and live paycheck to paycheck. Sometimes borrowing responsibility can keep people on an even keel, problem is like you said people get the per month mentality. Even billionaires borrow money because their money can make them more money and frankly can be used to be spent on things they want. All about balance. Got cash great, better to pay for things without interest. Reality is in todays world it is very hard to do

 

[nards444]

Well, it's new for 10 minutes. After that it's used. 3 years later...leased or not it's 3 years old/used. Some people wash their cars often, some do not. I do it 3 times a year or so whether it needs it or not.

If you turn in a lease with too low brakes or tires you're gonna be charged for it. Granted, if you owned it you'd need to put brakes on too, of course. But to be charged for tires that you'll never use sucks. If you own the car you can use the tires you just bought.

A lot depends on how often you change out cars...My pattern has been at about year 10 or 11 I change cars..i'm racking up a few more miles now so we'll see if that pattern holds up. I've bought new and i've bought 2-3 year old (1/2 the price of new, or used to be). My current car is a 2014, 81k miles, bought new, paid off last year. I hope to keep it 5 more years..150k miles or so, 10 years. I should be worth what, 3k then? So I paid 24k for 10 years, plus any repairs (mtce like brakes and such you pay regardless).

Dollar per mile cheaper than a lease.

BUT many folks trade in before they've paid off or just when they make that last payment..doen that in the past myself. 3 months of no payment and go get a new car again. In that case a lease might make sense.

A friend started leasing, in 2009 he got a steal on a camry - nobody was buying cars in the recession. he extended it (179.month , why not?) btu then he had sticker shock and ended up with a sentra for 219...he wasn't pleased but liekd the 'reliability of having a new car' so he's paying the price for that 'reliability'.

Yes, you CAN negotiate on a lease deal - MOST people do not. 20% of buyers don't negotiate at all, and its much higher with lease deals.

When I bought my 14 the interest was 1.2% on the loan..hard to beat that.

Buying and trading every few years is a lost cause and whoever does that is losing big time and better start leasing. Also if you are buying, new used typically can be a better deal as well. Just leased a new car for my wife, funny thing is dealer does the typical what do you pay what do you want to pay per month, lol. Said nice try we will talk about that later.

Typically on lower priced vehicles in particularly cars the lease vs buy equation is much different, and when I am speaking, I more or less talking about trucks and SUV or in other terms things that cost 40-50k, the lease equation looks more advantageous. If I go back to my situation and would have bought that truck for 48k and had 10% down on a 84 month note after 84 months with interest that truck would have cost me 53k. Keep it ten years it would run me a total of 53k before maint. Vs my current model of leasing would have cost me 60k over those same 10 years. The difference being is in buying I would have no payment 3 out of those 10 years, no miles issues(may be an issue for some isnt for me). On the flip side of the coin for the first seven years with a lease my payment is cheaper and I will have had virtually no maint expenses, now would that truck cost me 7k in maint over 10 years if I bought it, hard to say, maybe maybe not. But on the other hand at year 10 I probably have something worth around 5-10k at trade so I do get something back if I owned it.

All in the eye of the beholder. Personally Ill pay 7k more over 10 years for always have a new truck and never paying maintenance. I know the per month mentality is crazy sometimes but what that equates to is me paying an extra 50 bucks a month to do. Realistically with owning I would have had to replace tires a few times, batteries, exhaust, probably a front end etc, so that 50 bucks a month or 7k more would ultimately probably be much less or even break even, or even better could cost me less than owning.