Lease vs. buy - a real life financial comparison - Page 4
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    1. #76
      Quote Originally Posted by StlVDub View Post
      Exactly. Especially the bolded part. Same here. My wife and I are 30, we both have demanding full-time jobs and we have a 3-year old as well...and you hit the nail for sure. We're LUCKY to ever have an hour of free time anymore.
      Which is another reason why leasing is great. When I come out to the car in the morning.....I have neither the time nor the patience for anything remotely resembling a breakdown. I hit the start button, and the car better just...work.

      It also means my son rides in a modern car with modern safety equipment. Not a big deal 10 years ago for me....critical now. I won't acquiesce to a 10 year old car for him anymore...not at the rate new cars are developing with new safety, new safety tech, stronger crash scores, better lighting....I mean the list goes on and on.

      Weekend fun ride? Hell, give me an NA Miata with a nasty V8 shoehorned in it and a massive life insurance policy.....for all other needs, a leased car works well for me.
      Matt
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    2. #77
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      Quote Originally Posted by Porkchopexpress View Post
      I can think of two good reasons to lease:

      1. You want an electric car that will have huge depreciation like the Leaf or I3. The money saved in gas could justify the cost of the lease.

      2. You expect your income to go up significantly in 2-3 years and want to drive a nicer car than you could otherwise afford, like a college student.

      Otherwise, I think you usually are better off with traditional financing.
      Quote Originally Posted by surefooted View Post
      Or the car has artificially propped up residuals to move them
      Or the person owns a business and it's a 100% write off
      Or likes hassle-free changing of cars every 2-3 years
      Or many other reasons.

      These threads are annoying as people try to equate everyone else's situation to their own. If leasing doesn't fit YOUR situation, fine. STFU about others.
      Or you want an 80k car with a 40k income. Wait, that's wouldn't be a good reason..

    3. #78
      Quote Originally Posted by Senior Member View Post
      Or you want an 80k car with a 40k income. Wait, that's wouldn't be a good reason..
      Not necessarly. If you fit the leasing profile, and you can stay within contractual limits, AND there are lease deals which MAKE the $80,000 cost the same as a $40,000 one.....why not?

      Where people get into trouble is when they do not understand if they are leasing material or not. In other words, the guy that goes in wanting to buy, but the dealer talks them into a lease for $100 less because "it's cheaper".

      When you lease, you need to know you want to lease, and WHY you want to lease. When I do a car deal, I never really think about buying because it just doesn't work for me right now. I know I want to lease, in other words.
      Matt
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    4. #79
      Member Egz's Avatar
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      I wish I didn't drive anywhere so I could make a lease work for me.

    5. #80
      Quote Originally Posted by surefooted View Post
      Or the car has artificially propped up residuals to move them
      Or the person owns a business and it's a 100% write off
      Or likes hassle-free changing of cars every 2-3 years
      Or many other reasons.

      These threads are annoying as people try to equate everyone else's situation to their own. If leasing doesn't fit YOUR situation, fine. STFU about others.
      STFU really? If you don't want to read other opinions, don't. But to go out of your way to read a thread then criticize its existence makes you a bitter troll.

    6. #81
      Quote Originally Posted by Porkchopexpress View Post
      STFU really? If you don't want to read other opinions, don't. But to go out of your way to read a thread then criticize its existence makes you a bitter troll.
      He's just pointing out that there are a ton of valid reasons to lease. You responded by calling him a troll.

      That's really constructive to this conversation.
      Matt
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    7. #82
      Member Accidental L8 apex's Avatar
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      Quote Originally Posted by VT1.8T View Post
      I do. For the two daily drivers, we finance for 5 years and keep for at least 10, with only one car payment at a time.
      Same here. Only the next car purchase will be for my daughter(s) and boring and safe. Apparently, a Pro-Tour '70.5 RS/SS Camaro isn't appropriate for a teen to daily to high school. Would've been Heaven to me back then, but "I have bad ideas" and "should keep quiet".
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    8. #83
      While I fully understand that there are definitely some deals to be had with leasing, the example provided by the OP is definitely not one of them. Per the data provided, it cost him $13,418 to drive 46,635 miles, for a cost of just shy of $0.29/mile (not including fuel). Now, if he would repeat this lease 4 times, he will have paid $53,672 to drive a $22,095 car 186,540 miles over 12 years, essentially costing $31,577 more than if he would have simply bought the car and kept it. Sure, there would be maintenance and repairs involved over that period, but even it was $10,000 worth, he would still have $21,577 left to almost purchase a new identical car for cash!

      Now if he was really good, he would have bought this car after year 3 for $13k, and drove it for 9 years and 139905 miles, costing him only $0.09/mile! Again, let's say this 'beater' cost him $10,000 in maintenance and repairs, he would still only be into it for $23,000, or $0.16/mile. So comparing the original lease to buying this 3 year old car, he is paying $0.13/mile for a 'warranty' (or $1300 every 10000 miles)!

      Again, I am not criticizing leasing specifically, as it has its purpose. If you are going to trade your car every 3 years regardless of the financial implications, it can make sense. However, when looking at the true cost per mile, leases like this are definitely much more expensive over the long term than a less exciting 'buy and hold' strategy.
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    9. #84
      Quote Originally Posted by daSchtick View Post
      While I fully understand that there are definitely some deals to be had with leasing, the example provided by the OP is definitely not one of them. Per the data provided, it cost him $13,418 to drive 46,635 miles, for a cost of just shy of $0.29/mile (not including fuel). Now, if he would repeat this lease 4 times, he will have paid $53,672 to drive a $22,095 car 186,540 miles over 12 years, essentially costing $31,577 more than if he would have simply bought the car and kept it. Sure, there would be maintenance and repairs involved over that period, but even it was $10,000 worth, he would still have $21,577 left to almost purchase a new identical car for cash!

      Now if he was really good, he would have bought this car after year 3 for $13k, and drove it for 9 years and 139905 miles, costing him only $0.09/mile! Again, let's say this 'beater' cost him $10,000 in maintenance and repairs, he would still only be into it for $23,000, or $0.16/mile. So comparing the original lease to buying this 3 year old car, he is paying $0.13/mile for a 'warranty' (or $1300 every 10000 miles)!

      Again, I am not criticizing leasing specifically, as it has its purpose. If you are going to trade your car every 3 years regardless of the financial implications, it can make sense. However, when looking at the true cost per mile, leases like this are definitely much more expensive over the long term than a less exciting 'buy and hold' strategy.
      You do realize that a 12 year old car is not the same as a brand new one, right?

      The point you're trying to make has nothing to do with leasing and everything to do with keeping a car for a longer period of time. It's fine if that works for you, but many folks like to switch up vehicles and enjoy the new vehicle ownership experience. We could all drive a '95 Corolla and save a crap ton, but what fun is that?

    10. #85
      Member dmorrow's Avatar
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      Quote Originally Posted by tyintegra View Post
      We just turned in our lease of a 2014 VW Tiguan base model with a manual transmission (I.e. Absolute base model) and I am now an even bigger fan of leasing than I was before. Here is how the numbers break down using our real numbers compared to the numbers if we had purchased it with 100% cash.

      Lease:
      Terms: 36 month lease with 12,000 miles a year for 3 years
      Purchase price: $22,095
      Cap cost reduction: $9,000 - traded in a paid off car and applied the entire amount to the lease (we would take all of the cash next time)
      Monthly payment: $63 ($2,268 over 36 months)
      Additional miles purchased: 12,000 at $0.15 per mile (25% discount for purchasing them early) for $1,800
      Total miles at turn in: 46,635
      Lease end fee: $350
      KBB trade in value (Very Good condition) today: $10,377
      So, total cost during lease: $9,000+2,268+1,800+350 = $13,418

      Purchase with cash:
      Purchase price of $22,095
      Sales tax on $13,095 (22,095 - 9,000 trade in): $1,244
      Total cash paid: $22,095 + 1,244 = 23,339 (plus licensing)
      KBB trade in value (Very Good condition) today: $10,377
      Total cost after trading car in: $23,339 - $10,377 = $12,962

      So, leasing the car only cost us an additional $456 over the 3 years. But leasing gave us the ability to simply walk away at the end without trying.

      If we would have kept the miles at 36,000 the value today would have been $11,025 and the cost to lease would have been $11,618 and the purchase would have cost $12,314.

      So for all of those people that say leasing a car is the most expensive way to buy a car are wrong (at least in this case) and leasing a car just gives you more options if you don't drive a ton of miles and take care of your car.
      I agree that if the plan is to get a new car every 3 years then leasing is a good option to look at. At the same time if your plan is to get a new car every 3 years you really don't care much about minimizing expenses so who cares, do what you want. I am always surprised at these examples where people act like they are trying to save every dollar and make the best financial decision so they have two examples where they get a new car every 3 years.

      Then, yes leasing lets you simply walk away without trying, but the only way it is very simple is if you want to walk away right when the term ends. Decide you want to walk away somewhere in the middle of the term or a year after the term and suddenly the car that is financed is easier.

      I buy slightly used and keep it a long time, this lets me drive a car far higher up on the luxury/sporty price range and paying less than if I was buying or leasing a new, far cheaper car, every 3 years.
      Last edited by dmorrow; 04-13-2017 at 06:40 PM.

    11. #86
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      Quote Originally Posted by Maximum_Download View Post
      IN general, yeah. But it;s not an absolute, and carmakers like MINI, BMW, VW, and FCA are still major risks. So you're giving blanket statements to a problem that requires more detail.

      ANd when the cars I mention go bad, they are REEE-HEEEE-HEEEEALY expensive to fix. There is a damn good reason why luxury cars are, for the most part, leased. And the people who can afford those cars aren't exactly stupid.

      So no thank you, those cars will be leased if I am interested in one. If you want something like a Honda, sure, buy it and pay it off.....but the lease deals on Accords right now are so good....WHY?
      Sorry but these are just rationalizations to justify your decision to lease. The thing is you don't need to do that. You can just say you prefer being in a new car every three years, and that you like the flexibility of being able to walk away from a car at the 3 year point with no risk.

      But to imply that an Accord or Camry will suddenly need thousands in repairs after 3 years, or even 5 is ridiculous. Yes a Mini might, but for the average person with a Corolla, Accord, etc there aren't any potential landmines that will suddenly popup.

      Which is why the calculations say that after around 4 years the ownership starts to pay for itself. The number of friends of mine with 7-10 year old cars who've been stranded or completely hosed on repairs is about 0 for me. Most new cars will easily run to 150k miles with few repairs. Maintenance is separate, but the lack of car payments more than makes that up in savings.

    12. #87
      Consumers' runs the numbers every year....

      your taking a $2000 to $2500 hit on a lease vs buy and then sell...Lots more on some models, bit less on some.



      As to replacing the car every 3 year or sooner... your taking the massive depreciation hit the first year, lease or buy. The dealers just love the one/two year lease cars. It makes them lots of money.

      But now we are in the throw away millennial world.. Eat every meal out, buy a new car every two years rather than have to maintain it/wash it or even clean out the mc donalds bags and other trash., Rent home instead of ever owning. Change jobs everytime we get our feelings hurt.. Retirement planning,, is that we hope we die first. We are too dumb to think past our next party.

      YMMV

    13. #88
      Member Dirty Hatch's Avatar
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      I feel this topic has been exhausted many times over and over again. Maximum Download brings up a lot of good points regarding leasing, some of them I agree with and some I don't. Until you stop driving, you will always have a car expense, weather it's a lease payment, car payment or setting aside a certain amount of money each month to buy a car. It really comes down to, how much car can you afford and how much are you willing to pay.

    14. #89
      Quote Originally Posted by buumer View Post
      You do realize that a 12 year old car is not the same as a brand new one, right?

      The point you're trying to make has nothing to do with leasing and everything to do with keeping a car for a longer period of time. It's fine if that works for you, but many folks like to switch up vehicles and enjoy the new vehicle ownership experience. We could all drive a '95 Corolla and save a crap ton, but what fun is that?
      I completely understand that a 12 year old car is not same as a new car, however, the OP was indicating that it was not the most expensive way to own a car, which in his case, it clearly is......

      Quote Originally Posted by tyintegra View Post
      So for all of those people that say leasing a car is the most expensive way to buy a car are wrong (at least in this case) and leasing a car just gives you more options if you don't drive a ton of miles and take care of your car.
      If you want to lease a new car every 3 years, knock yourself out and own up to it. "Yes, it's not the TFL approved but I wanted it." I get it....I've had a few new cars myself. Just don't post about what a smart financial decision it is when it is just so easy to disprove.

      Now if you can show me one of those crazy sub $200/mo deals from leasehackr, I am all ears, because yes, those are some terrific bargains!
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    15. #90
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      Quote Originally Posted by tyintegra View Post
      In our example (others of course will be different), here is what we would have paid in these 3 different scenarios:
      Lease for 3 years and finance for 2 at 3% interest:
      - total cost of lease: $13,418
      - cost to finance buy out of $11,400 for 2 years at 3%: $11,760
      - total cost over 5 years: $25,178

      Lease for 3 years and finance for 5 at 3% interest:
      - total cost of lease: $13,418
      - cost to finance buy out of $11,400 for 2 years at 3%: $12,291
      - total cost over 8 years: $25,709

      Finance for 5 years at 3% interest:
      - total purchase price: $23,339
      - total cost over 5 years: $25,162

      In this case, I would definitely choose to lease for 3 and finance for 2 but leasing for 3 and financing for 5 isn't horrible in my opinion.
      Quote Originally Posted by daSchtick View Post
      I completely understand that a 12 year old car is not same as a new car, however, the OP was indicating that it was not the most expensive way to own a car, which in his case, it clearly is......



      If you want to lease a new car every 3 years, knock yourself out and own up to it. "Yes, it's not the TFL approved but I wanted it." I get it....I've had a few new cars myself. Just don't post about what a smart financial decision it is when it is just so easy to disprove.

      Now if you can show me one of those crazy sub $200/mo deals from leasehackr, I am all ears, because yes, those are some terrific bargains!
      I am not saying that leasing is the best financial decision since the best financial decision would be to buy the absolute cheapest and relatively reliable care you can and driving it until it needs to go to the junk yard, then rinse and repeat until you die.

      I am simply saying that people that say leasing is the worst possible way to buy a car isn't completely true.

      So, if you are going to buy a new car, you should at least consider leasing as a viable option being that it might not cost you that much more than paying cash and it gives you options on getting out of the deal without too much hassle after 3 years. And if you decide that after the 3 years you do like it, based on the figures above, you can purchase that car in a few different ways and still not pay too much more than if you would have simply paid cash to begin with.

    16. #91
      Quote Originally Posted by Form Ocean View Post
      I realize it doesn't make sense if simply comparing $1000 vs a year of car payments. But it's also not knowing when the next major failure will drop. Major repairs are a huge hassle when served with a side of breakdown/towing/rental/lost work/stranded family member/inconvenience. I was once deployed overseas and my wife had to get towed and deal with a repair of my too-old car. A life lesson that if you don't trust your car's reliability, then you must unload it.
      Certainly, an unreliable car imposes costs beyond money paid for repair.

      A lease can also carry a psychological cost of uncertain debt at the end of the lease. Abusive repair estimates after turn in can still be a problem, and knowing that you will have to turn a car in without any damage will be uncomfortable for many.

      Leasing may not be terrible financially depending on the lease contract, but not all costs to an individual will be financial, and the financial outcome may be difficult to predict.

      In 2007, I walked into a VW dealership and bought a Golf. I want to say that when all was said and done, it was a little under $17,000. During the next couple of years, that depreciating asset retained more value than any stock I owned. If I had sold $17,000 in stock to buy that car, that same stock could have been purchased in 2009 for less than $3,000.

      I like the way I buy cars because it's simple. The only issues are 1) whether they have the car, and 2) how much the check will be.
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    17. #92
      Member Hawk's Avatar
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      Quote Originally Posted by troyguitar View Post
      Keep the car for 10 years instead of 3 and the math changes significantly.
      Lease short term. Own long term.

      (However owning short term also give you the ability to change cars when you want vs. being at the mercy of your lease agreement and whether the leasor will let you break it.
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    18. #93
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      Quote Originally Posted by RENOG View Post
      You must be young, like in your mid 20's for such a question. Plenty folk keep their cars for this long, I do I have two right now in my driveway a 02 Yukon Denali and an 05 Acura TSX both of which were/is immaculately maintain. I mean if you like what you bought and do much of your own work then hey you hold on to them..Its all personal preference and its nice to have the option to either own or lease.
      No I'm not. I'm almost 42, I just don't hang onto daily driven cars for more than about 4 years. 5 years has been my max and that is with my current car. I just prefer to have new cars to get into. I also don't rent and my retirement is all setup with all the passive income that I have going. The only person I know who keeps a car for 10 years is my wife's dad. My fun cars I hang onto for a while, just not my daily driven cars.
      I drive a car.

    19. #94
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      Quote Originally Posted by whalemingo View Post
      Who keeps a car for 10 years though?
      who doesn't?

      newest car i own is a 2002.
      Quote Originally Posted by VigorousZX View Post
      In their unquenchable thirst for world domination, the aristocrats tax peoples time so as to keep its cattle viewed populations forever in servitude. They have gone as far as brainwashing and banning the western world that marrying your first cousin is forbidden and results in retardation... and thus have disturbed human evolutionary densities because broken families are easier to control and will better fall into debt slavery.

    20. #95
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      Quote Originally Posted by cockerpunk View Post
      who doesn't?

      newest car i own is a 2002.
      Just curious. Did you buy them new or used?

      Average length of ownership for a new vehicle is about 6 years and about 5 years for a used car.
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    21. #96
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      Quote Originally Posted by BostonB6 View Post
      Just curious. Did you buy them new or used?

      Average length of ownership for a new vehicle is about 6 years and about 5 years for a used car.
      i did not buy it new, but i will own it for over 10 years for sure.
      Quote Originally Posted by VigorousZX View Post
      In their unquenchable thirst for world domination, the aristocrats tax peoples time so as to keep its cattle viewed populations forever in servitude. They have gone as far as brainwashing and banning the western world that marrying your first cousin is forbidden and results in retardation... and thus have disturbed human evolutionary densities because broken families are easier to control and will better fall into debt slavery.

    22. #97
      Quote Originally Posted by vwwtchr View Post
      Sorry but these are just rationalizations to justify your decision to lease. The thing is you don't need to do that. You can just say you prefer being in a new car every three years, and that you like the flexibility of being able to walk away from a car at the 3 year point with no risk.

      But to imply that an Accord or Camry will suddenly need thousands in repairs after 3 years, or even 5 is ridiculous. Yes a Mini might, but for the average person with a Corolla, Accord, etc there aren't any potential landmines that will suddenly popup.

      Which is why the calculations say that after around 4 years the ownership starts to pay for itself. The number of friends of mine with 7-10 year old cars who've been stranded or completely hosed on repairs is about 0 for me. Most new cars will easily run to 150k miles with few repairs. Maintenance is separate, but the lack of car payments more than makes that up in savings.
      I have said as much in many posts over the years - i prefer to lease, for the reasons you mentioned. In fact, I said so in this thread - I want my son in a new(er) car rather than an older used car.

      I am considering buying our Accord off the lease, by the way, and keeping it for 10 years....I feel it would be a good risk. And I won't lie - I would like to have a paid for car.

      But the problem with that is I KNOW I won't keep it 10 years. And when you look at what it will cost to buy it used, and add maintenance on top of that....well, why would I do that when I can go lease another Accord for less money?
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    23. #98
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      Quote Originally Posted by Dirty Hatch View Post
      I feel this topic has been exhausted many times over and over again. Maximum Download brings up a lot of good points regarding leasing, some of them I agree with and some I don't. Until you stop driving, you will always have a car expense, weather it's a lease payment, car payment or setting aside a certain amount of money each month to buy a car. It really comes down to, how much car can you afford and how much are you willing to pay.
      This

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    24. #99
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      Quote Originally Posted by BostonB6 View Post
      Just curious. Did you buy them new or used?

      Average length of ownership for a new vehicle is about 6 years and about 5 years for a used car.
      I have had my 06 matrix since 06.
      My 94 golf since 05.
      We just recently gave our 05 focus, bought in 06, to my little brother about a year ago.
      But I have had a few short term vehicles in that time so I am sure the average is much less.
      Quote Originally Posted by Turbio! View Post
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    25. #100
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      Quote Originally Posted by Maximum_Download View Post
      And when you look at what it will cost to buy it used, and add maintenance on top of that....well, why would I do that when I can go lease another Accord for less money?


      Didn't we see earlier in this thread that paying a lease for 10 years is more expensive than buying a car and keeping for 10 years?

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