11-13-2018, 07:04 PM | #1 |
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Why do you lease?
I understand the basics of leasing but have never and don't think I ever will. I am an owner not a renter. I like to own my cars and be able to modify them if I like. Maybe this is 20th century thinking but I am just not a lease guy. I buy my cars 2-3 years old so the last owner (sucker) paid my depreciation. Even though I have changed cars quite a bit in my life I like to think I am keeping them long term. So my real question is, is there a certain income threshold where leasing becomes better financially than buying. I just feel leases are to restrictive even though I know anything can be negotiated for the right price. Oh and I do understand some people need the latest and greatest right now and don't do maintenance. I am not one of those people. I also don't lease my iphone yet but that may not be possible in the future with the new prices. Just wonder.
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11-13-2018, 07:29 PM | #2 |
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I am with you, have never been able to lease, my current car is a 2015 Gran Coupe Sports, I have the build sheet, over $54K, bought it off lease, pre-owned certify, 30K miles, still under factory warranty, paid $28K, the previous owner paid, over $26K for the lease, and drove it for 30K miles, I figure if I drive my car for another 50K miles, it will have 80K and probably still worth $10-$12K, which is the down payment for my next car.
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11-13-2018, 07:31 PM | #3 | |
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In my aunts case she is retired and wants a car she doesn't have to worry about maintenance and she doesn't drive much. Also, she can get a new car with the latest technology. She's leased her cars for the past 10 years and has leased 2 Mercedes GLA back to back. |
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11-13-2018, 07:37 PM | #4 |
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Lessors are suckers (most often). More so when dealing with expensive vehicles.
A lot of times... people are paying $20k plus to RENT a car (they cant afford) for 3 years when they could have purchased a vehicle (that they could afford) for the same $20k that will last MUCH LONGER THAN 3 YEARS. I doubt we'll have many chime in about their awesome lease deals. Ill be waiting with my calculator... |
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11-13-2018, 07:54 PM | #5 | |
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11-13-2018, 08:02 PM | #6 | |
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Leases exist for a reason - because there is a market for them. Sounds like you at least know what your getting into when you lease and understand that you are paying a premium, which is completely fine. I cant say that if I wasnt stupid rich I wouldnt lease the sickest luxury car and SUV combo every three years and not bat an eyelash but I have other priorities that I have to tend to first. I guess the point is - there are a lot of people leasing expensive cars that they cant afford which is really not a good long term plan for building wealth. No matter what way you slice it, renting expensive cars for a certain persona or status is never a good idea money wise. |
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11-13-2018, 08:03 PM | #7 |
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Leases are great. It creates a glut of 3 year old, like-new vehicles for half off sticker price. Someone else owns the steepest part of the depreciation curve.
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11-13-2018, 08:11 PM | #8 |
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I like buying one year lease regret turn ins. Lol
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11-13-2018, 08:17 PM | #9 | ||
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I get your point on cheap lease deals.
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11-13-2018, 08:21 PM | #10 |
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People lease for multiple reasons, to name a few:
1. Tax Benefits: Better tax benefits if you own a business or use a car for business purposes. Accountants always recommend leasing over financing. (At least in Canada) 2. People who like to switch cars every 2-3 years: Over the past 4 years I've went from a 328xi to a 440xi GC and now a 340xi MPE, looking to get into a M340xi in two years. Makes no sense for me to finance after factoring in depreciation etc., plus my dealership usually lets me trade up a lot sooner than the lease maturity date. Definitely not the wisest decision to pretty much be paying a monthly fee just to rent a new car forever, but if driving a new car makes you happy and you make more than enough for this to be a tiny part of your income, leasing is much, much better than financing. |
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11-13-2018, 09:27 PM | #12 |
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I also like to buy. However, I tried to avoid used. Instead, I buy new that is on sale. Like previous model year model that is still in dealer's lot, and they are offering 20% off to get rid of it. That way I buy cheaper and I can assure that I break in the car properly.
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11-13-2018, 09:56 PM | #13 |
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Having worked for Ford Credit I know why dealers love leasing: they make more money. The source of that money is people who lease cars. Salesmen love leasing because payments on a lease tend to be lower than buying, and the lower the payment the easier it is to close a deal. If you want a new car every three years or less leasing makes sense. If you keep your cars for four years or more buying is the better option. I've never leased, as I always keep my cars at least six years.
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11-13-2018, 10:07 PM | #14 |
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Ive been told by an inside source that as far as the dealer is concerned, leasing is the same as a purchase.
No matter what, the dealer "sold a car." |
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11-13-2018, 10:10 PM | #15 |
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One other factor in leasing (at least where I live) is that of sales tax.
If you buy, sales tax is due on closing in the full amount up front. In the case of a $75K car (say), that sales tax here would be $11,250. If you lease the same car, sales tax is paid on the monthly payments, nothing up front. If you are getting a new vehicle every 3 or 4 years, sales taxes can be huge if buying each one.
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11-13-2018, 10:11 PM | #16 |
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Yes, that is also my understanding.
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11-13-2018, 11:03 PM | #17 |
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the reason I lease? I tend to switch cars every 3 years or when I get bored of it. I used to finance my cars, and use to lose money or at least break even when trading or selling.
Leasing to my particular situation works. I dont lose out on money if i trade to another car. Less money up front as i don't put money down. and dont have to pay taxes on the entire car, only monthly use. (California, may differ elsewhere). and last for me is warranty and maintenance. I want to make sure the car is cover and yes i know mods and warranties dont mix but that purely depends on the situation. |
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11-14-2018, 09:42 AM | #18 |
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I didn't have to put any money down up front or do any deposit so it made sense for me. I signed, paid my first months payment and drove home. I also like getting a new car every 3 years with new tech etc. It's in warranty for the time I will own the car so I am worry free in that dept.
Either way getting a new car is a bad but usually necessary investment so do whatever makes you happy |
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11-14-2018, 09:47 AM | #19 | |
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Both options make sense to me either way I guess it depends on the person. |
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11-14-2018, 10:40 AM | #20 |
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It's like a lot of things in life, depends on circumstances and preferences, If you lease you are always driving a new car maintenance free but you are always making a payment, if you buy eventually you will be payment free but you will lose your ass on depreciation...
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11-14-2018, 10:47 AM | #21 |
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Well how about taking your time with a car of your choice and using the first three years to make sure if you really enjoy it that much that you now want to keep it. Upon lease's end returning it, re-certificating it, and purchasing it as CPO with that proper discount, etc.
Sounds weird, but if you think about it ... Just a thought |
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11-14-2018, 10:56 AM | #22 |
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Leasing is just another option designed for the consumer market driving by consumption. Humans have a difficult time to resist having more by paying less - at least based on how humans see it.
Consumers: new car every year, fixed payments, no warranty expenses, can drive a car which supports my image plus all other intangible goals. Businesses (manufacturers, dealers, finance companies): potential to make more money, creation of a repeatable and consistent market for used cars, new customer segment to monetize even further. It's just a business response to match consumer demand with a profit motive. Leasing IS very profitable. |
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