Well living in So Cal, I am obligated to have a car. Now I can keep renting them
and send monthly checks out for a 4 year rental, then rent another one, then another, then another. I'd be sending out checks to someone every month, forever. Or I can rent one then buy my own used car from myslf and write a big check for that purchase or keep writing them smaller checks for 3 more years. Still it's a lot of checks to write

Or I can buy, making slightly higher payments for 1 year longer and then when it's done decide to keep the car and write no checks to anyone for an extended period. Or, I can sell and get a check from someone else. I have an option. I'm not forced to do anything. You write checks all the time.

My last weekend fun car was a vette. Purchased new in 1993. I paid $510 a month with $2500 down for 5 years. I kept the car and had fun with it for 12 years, then sold it for $11,000. At the same time the dealer was offering a lease for the same car. $4000 down and $439 per month for 4 years. Those people gave back the car in 1997 and had nothing but cancelled checks and memories, while I was still driving till late 2004 paying only insurance and registration.

Obviously you are set in your ways and me in mine.

 

If there's anyone I'd like to buy used from it's me!

With most leases - or the ones I take - I have the option to walk or buy at the end of the...

The way you describe it doesn't seem to take into consideration the actual numbers...

Its all about perspective.

 

Actually I made another post that addressed your numbers that I must have failed to properly post.

You pay $17933 lease. Then you say you can buy for $17521 adding up to $35454. Therefore cheaper than buying outright. True if you have the residual
$17,521 in the bank, will you ? Probably you, or most leasers would then pay a finace charge on that amount if they decide to keep the car. You need to add that fiance charge into your calculation. You don't know however what the interest rate will be in 4 years. Could be 3% or 8%. My guess would be higher rather than lower. After makeing payments for 4 years for the lease, you may be faced with 3 or four years to pay off the residual. Ijust don't want to make car payments that long. If you never pay a residual to keep a car then payments never stop at all.

I think in most cases a lease costs more, in the best cases it costs about the same.
At any rate it's been fun trading posts.

Steve

 

agreed & better yet we both drive a really nice car!

 

One other issue regarding leases. My daughter has gone through this recently. A selling point of leases is that you can decide to give car back or keep it right ?

Not quite.

What happens if you lease that new 500CLK for 4 years then lose your job? Or lose your health ? If I bought it I can dump it anytime without beating up my credit.
If you lease it's your car come hell or high water for 4 years, then it's their car again.

Not to beat a dead horse here, but it is an issue. My daughter and her husband both lost jobs and couldn't get out of a Mercedes lease. When they needed cash desperatly for really important things they're making these payments on a rental car.

Regards

Steve

 

If you know you will only have the car 3 or 4 years, LEASING IS THE BEST POSSIBLE OPTION!

Pro:
No depreciation risk
No pain in the ass selling a car later
Predicable expenses
Tax deductabe if used for a business

Con:
If it is totalled, you have nothing as it is not your car.
No "sense of ownership". This is just psychological really, expeccially if you only keep it 3-4 years.

Financially, it is IDENTICAL to buying and selling in 3-4 years, without the pain and without the resale risk. I bet there were a bunch of people who leased F150s hoping to cash out (as you know, a 3 year old F150 is probably worth between 35-40% of its original price!).

 

With many lease companies you can get out by paying the residual. You can agree to sell it to someone, and then use that money to buy out of the lease. exactly the same as selling something you own, just one more step.

there is a fee. of course, that fee is IDENTICAL to the fee you would pay at the end of the lease (the "disposition fee").

bottom line: with a good lease company, what you said is not true.

 

snowman, the costs of doing what you said are exactly the same as they would be if you were to finance a car for 8 years.

the lease option will cost slightly more due to the acquisition and end of lease paperwork fees, but generally rates for leasing and purchasing are comparable (given similar credit ratings). Lease rates (aka money factors) may be slightly more, but the beauty of the free markets in the US means that finding good lease rates is not hard.

 

Be sure to call your insurance company and find out about the cost of insurance *before* leasing the vehicle since some insurance companies require a much higher level of insurance which can raise the cost significantly.

In general, it's always a good idea to get your insurance quotes before buying/leasing any vehicle -- some people just don't do this and it bites them hard once they make the commitment.

~AJ

 

maybe he's writing it off as part of a business?