quote:

Originally posted by OKCGene:

. . . if it's a German car, lease it, NEVER buy a German car.

I do not know about the current crop, but one of the lowest cost cars I ever owned was a 1978 Mercedes 240D.

A very simple car, normally aspirated (non-turbo) four cylinder diesel, manual transmission, very little to go wrong.

I was working in Barcelona at the time, picked the car up at the Mercedes delivery center in Sindlefingen (spelling?), paid $17,900 for it, drove it for 18 years, close to half million miles, sold it for five hundred when I was finished with it.

Replaced wear items like starter motor, clutch, etc., but not one unexpected repair. Reliable as an anvil.

quote:

Originally posted by V-Tail:

quote:

Originally posted by OKCGene:

. . . if it's a German car, lease it, NEVER buy a German car.

I do not know about the current crop, but one of the lowest cost cars I ever owned was a 1978 Mercedes 240D.

A very simple car, normally aspirated (non-turbo) four cylinder diesel, manual transmission, very little to go wrong.

I was working in Barcelona at the time, picked the car up at the Mercedes delivery center in Sindlefingen (spelling?), paid $17,900 for it, drove it for 18 years, close to half million miles, sold it for five hundred when I was finished with it.

Replaced wear items like starter motor, clutch, etc., but not one unexpected repair. Reliable as an anvil.

Much different to the current MB lineup.
Both my 82 240D & 82 300SD were uber reliable & easy to maintain.
My 15 C300 was good, but definitely more upkeep, by comparison.

I've been leasing my cars for about 14 years now. I used to be one that would drive a car until the wheels fell off. We got to the point where the house was paid off and doing OK money wise.

But when I go to lease a car, the only number that matters to me is the per month cost. Lease payment plus 1/36 of the down. I go in knowing I not going to keep the car at the end of the lease. So the dealer can play with the numbers all he wants. I just care what the cost is per month.

I used to watch lots of fellow employees that would blow $10 every morning at Starbucks. I don't spend much more than that for my car payment.

I enjoy driving something different every 3 years, especially the way cars are changing so fast. I take care of my cars and never go over the mileage limits, so I don't have any issues when I turn them in.

But my wife still thinks it is stupid. She drives a 2000 Tacoma PreRunner that looks brand new.

We leased a 2017 GMC Acadia. The Acadia list price was $54,000. They wouldn't budge on the price and we needed a vehicle immediately. We traded in A GMC Yukon and $10k was taken off the sticker price. Monthly payment was $321. Lease was for 36 months 12,000 miles per year. Buyout was $27,000.

At the end of year 2, we parked the Acadia for 2 months as we put a lot of miles on it. My daughter was away at school so my wife drove the daughters car in the mean time. Covid hit, wife is a teacher and taught online from home. We turned the Acadia in with 32,000 miles at lease end.
Part of the lease agreement was at turn in we had to pay $495. What that actually was for I can't say but it was in the contract so I payed. Two months after paying I received a letter from GMC finance asking for another $35 for fees and taxes. It wasn't in the contract, they couldn't say what fees and taxes were for.
Two weeks ago we find my wife's credit score dropped 25 points down to 805. Now I have to go thru the trouble of contested a charge to get it off the credit rating. As the contract never stating the additional charge I know we can get it taken off, but it is still another headache to deal with.

I bought a new vehicle and will not ever lease again. Nothing to show after paying for 3 years and a large up from fee. Commercials that show 0 down, low monthly fee don't show the real hidden fees and low miles you can drive by lease agreement.

Some states only charge sales tax on the lease payment. Others, I believe IL, charge the entire sales tax of the purchase price divided into the number of payments.

That affects the monthly payment quite a bit. I leased a few cars in my 20's, mostly when I worked for Ford and could get employee pricing on Fords and Mazda's with a residual value based on retail price. The terms were set by Ford so there was no silliness by the dealers.

Leases used to be very profitable because dealers would sell customers on the monthly payment and jack the sales price to equal the inflated payments. Also due to opaque but high interest rates.

One dealer told me about a customer that wanted to undo a lease and purchase the vehicle after a few days and found out he had been jacked by thousands on the price. They had to sneak the salesdude out the back because the customer was about to kill him, or at least beat the shit out of him in front of the entire dealership.

There have been various "truth in leasing" laws passed since then that help. Also, lots of leasing companies took a bath on overestimated residual values, so residuals are lower now and payments are higher.

I drive too much to lease, or I did before all of the work at home stuff started. Now I barely drive and I keep getting "your car may be due for service" emails. At this rate I will get one oil change a year, until I have to start commuting again.

This message has been edited. Last edited by: Lefty Sig,

You need to do a lot of math. With a lease, there is up-front, monthly (which varies with how much total mileage you buy), turn in repairs, and or buy-out. Buy-outs are typically high, and they won't negotiate.

So the up front is what you pay to get into the car, in this case, $3k.

Monthly varies by mileage, but tends to go up quickly if you need miles.

All maintenance must be done.

There will be a mileage overage charge if you go past your allotment.

Some leases will have charges at turn-in for new tires, professional cleaning, bodywork, etc., so the used value will be higher.

Dealers typically don't negotiate the lease buy out as they want to roll you into another lease, or a new car.

I did it once, many years ago, and won't don it again, as my per mile cost of ownership was much higher than owning.

quote:

Originally posted by RogueJSK:
Leasing is primarily enticing if you're the kind of person who absolutely has to have a new car at all times, and always wants your cars to be under warranty, so would be trading in a car every year or two anyway.

This right here. The longest I have owned a vehicle is 27 months, and that was because I really loved that car. Most cars I only kept for 12-18 months.

One other upside to leasing is there is no need for GAP insurance. If you total the lease, any difference in the insurance payout and the value if the car, is eaten by the lessor.

I tried leasing twice. Once was a no loss trade up from a Q40 to a Q50. Eight months later I traded the Q50 on a BMW. That stung a little.

If you’re leasing because you don’t want to stress about having a Taco and not being able to offload it in a year or two, remember that used Tacos are going for almost the same price as new. It’s truly ridiculous.

As far as money down on a vehicle, or payment calculations, in the years if buying, selling, trading, leasing cars I have a quick calculator for this, assuming you have good credit and aren’t paying silly interest rates.

Purchase: For every $1k financed, the payment is $17/month.

Zero Down Lease: For every $1k in down payment they are asking, increase the lease payment by $25. This has seemed to be extremely accurate.

$3k down, payment goes up $75. $140+75 = $215 plus tax (leases pay sales tax on each payment). So around $235 a month.

The other thing to look at is the residual. The residual should be an accurate representation of what the car will really be worth at the end of the lease period. The difference between the residual and the sticker price, divided by the number of lease payments should balance out.
The residual on a Taco is pretty damned high, that’s why they can lease it for so little.

My wife and I have had a car addiction. We always wanted something newer, fancier, faster, more of this or that. It’s not like we were trading old shitbox cars. Most cars were either brand new, and most were pretty damn nice cars. Being a guy that has bought/sold/leased well over 30 cars in the last 17 years the best advice I can give you is buy the Taco. No need to lease a vehicle that has such a high resale value.

While this doesn’t necessarily apply to the OP: The only other good advice I have, is don’t waste money like my wife and I used to do and get a new vehicle every year. There are far better things in life than having a shiny status symbol to drive around.

There’s several good reasons to lease as long as you don’t try and convince yourself it’s cheaper.

If you’re the type of guy who wants to drive a nice new car every three years or so, and you don’t drive a ton of miles, then leasing gets you a lot more car for the monthly payment. If this describes you, I think leasing makes more sense than buying a new car on credit every few years.

After reading all the above I’m pretty convinced people who lease “think” that they are saving money. There are always the outliers who make money on a deal but you probably aren’t that guy.

I don’t think I’m particularly lucky. I buy quality middle of market cars, Toyota’s, Subaru’s, etc. I do basic maintenance. I could give a shit about mileage. I own them. For years.

Nothing above tells me I’m doing it wrong except one thing. I buy new. I should buy a car that’s a year or maybe two old and do the same thing. Leasing is for people who need new cars. All the time.

Parking a car because you are worried about overages is insane.

quote:

Originally posted by pedropcola:
I don’t think I’m particularly lucky. I buy quality middle of market cars, Toyota’s, Subaru’s, etc. I do basic maintenance. I could give a shit about mileage. I own them. For years.

Nothing above tells me I’m doing it wrong except one thing. I buy new. I should buy a car that’s a year or maybe two old and do the same thing.

This is the "financially optimal" path, espoused by Dave Ramsey and others.

Buy a lightly used mid-value car with a reliable track record. Drive it 10+ years, or until the wheels fall off, or whenever the repair costs start nearing/outweighing the value of the vehicle. Save the money you'd otherwise be spending on a monthly payment, using a bit of these savings for repairs, and eventually using some of that total savings plus any remaining sale value of the car to buy another lightly used car when it's time. Put the rest of the savings towards investments, retirement planning, home remodeling, etc.

You won't have a fancy new car every couple years, but you'll come out well ahead financially.

Don't. Unless you can expense the payments as deductible business expenses, buying is financially better. You need to be using the car in your business to be able to expense it.

It depends on the vehicle and your situation. Certain vehicles actually lease out much cheaper than you could ever buy one for. You can't just make a blanket statement saying that it's the worst thing someone can do and buying is better. Everyone's situation is different and no different than financial advice, it depends on each persons individual situation.

Over a 9 year period I leased 3 different Expeditions with stickers of $36-40k, with an average payment of $425 a month and no money down and out of pocket repairs/maintenance over that 9 years was around $1200 total. When you factor interest on a buy, and repairs on keeping the first one 9 years, I was money ahead on leasing.


Financing a 2 year old vehicle you plan on keeping forever is: almost out of warranty, wear items (tires, brakes, etc.) all right around the corner, warranty almost up, and interest rates higher than financing new. WHen you look at rebates and financing incentives, it makes a lot more financial sense to buy a new one and keep it an additional 2 years. I sold many 2-3 year old vehicles at the dealership where the buyers could've walked right next door to new car sales and bought a brand new one for the same monthly price or $1,000 more after you deducted all of the factory rebates....... At least for most of your payments on a new vehicle, there are no out of pocket repairs or maintenance items like tires, brakes, or surprises.

Leasing has several advantages. If it gets totaled you don't need GAP insurance and you're not underwater. You drive a nice new car with the features you want. Payment outside of car payment and insurance is next to nothing because everything's under warranty and all wear items are new.

Anyways, find a lease with the mileage you want, months you want and with just inceptions down. I wouldn't put more than inceptions down, because if the vehicle gets totaled you don't get that back. Sometimes trim levels change the lease price quite a bit and a better model with many options included leases out cheaper than the cheap model. If you're over-mileage, or the vehicle is worth a lot more in the end, you can always buy it and then sell it at the end of the lease. My last leased vehicle was worth $26-27k at the end of the lease and my buyout was $19.5k, and I really liked the vehicle so I bought it and kept it another 7 years.

^^^^^^. Nope. You already heard the smart play. This ain’t that.

If you want a new car every 2-3 years, buying the car and selling it when you want a new one is going to be cheaper than leasing. If the residual value is estimated correctly, you can get about that much when you sell it. Leases have higher interest rates than loans, so they cost more, it's really pretty simple.

Dealers tend to get higher selling prices on leases too, and they will push you to buy add-ons that cannot be capitalized into the residual value, meaning you will pay for ALL of the add-on during the lease period. This is because most dealer add-ons are ridiculously overpriced and leasing companies will not permit them to be "residualized".

What the lease does is make the "trade-in" easy. No need to sell, no need to negotiate, just turn it in. And I think this is the real attraction - fewer transaction hassles - but you do pay more for that.

Once when I had a lease I had to turn in, I didn't really want a new car at that moment, and had to settle for something that was available because I needed a car. Another time I got hit with an absurd wear and tear charge. Buying a car you leased is a money loser vs. buying in the first place. Sometimes you get one you like and don't want to get rid of it - I drove my 2002 WRX for 11 years and 200,000 miles because I liked it, and having no car payment for 6+ years was nice.

Over the last 25 years, I’ve leased and bought cars so I reply to this thread with experience.

The answer is, IT DEPENDS.

I have a Toyota 4runner trd pro arriving at the dealership next week and I will be buying it as i plan to keep it for a long time and these trucks hold their value very well. Toyota knows this and so there are no good leases offered, and a fair sale price is MSRP. This will be the first time I buy a car at asking price.

My last three cars, a Mercedes c63, followed by a BMW 750, and then a 550m, were all leases. They are prone to issues and their resale value is approximately 50% at 3 years. They do lease well though, relatively speaking. Meaning that my monthly payments x36 are lower than sale price minus trade in value.

My wife is on her second lexus gx460. These lease really well so it’s a no brainer to get a new one every three years before spending money on new tires, brakes and a big service at 40k miles.

I had a Porsche gt3 that I bought CPO, drove it for 3 years and sold at a total cost of ownership equaling less than 200/month.

The bottom line is that every deal is different and it’s up to the buyer to know what the numbers are. There are no hidden numbers in any lease - miles, cost per mile for overages, lease end fees, etc. are all in the contract.

For a Tacoma, i suspect the cost is close between leasing and owning. Their residuals are high, but so is the factory support in terms of money factor rates.

quote:

Originally posted by pedropcola:
^^^^^^. Nope. You already heard the smart play. This ain’t that.

It depends on the situation. I was a salesman at a Ford/Lincoln/Mercury dealership for about a year in 2002. My brother works has been working at a large Ford Dealership for 4 years now, 3 years as a salesman and 1 year in finance. Ford changes their deals every single month. One month they'll have excellent lease deals, the next month horrible lease deals and really good finance deals, and it flip flops month to month depending on what type of paper Ford Motor Company wants to hold. You can get an excellent lease deal on say a Ford Expedition one month, and the next month it's $150 a month higher on the exact same vehicle. Sometimes the higher trim level with no options, leases out cheaper than the lower trim level with a few options (that are included in the higher trim level).

Let's face it, a lot of people are on a 3-4 year rotation with ownership cars and not keeping them a long time. I cannot tell you how many people had to keep rolling negative equity into the next and next vehicle. IN some situations leases make sense.

My last leased vehicle was a new 2008 Eddie Bauer Expedition with a $39.5k sticker.... lease payment was $505.94 a month with 6% FL sales tax included (only inceptions down), total payments: $18,213 ($1100 was sales tax), my buyout was $19,500 at 3 years old.......which I paid cash for....total out of pocket was $36,621 + Florida sales tax. At 3 years on a buy I'd have higher payments and negative equity.

And the very next year I had to do tires and brakes.......but ended up keeping it from December 2007- June 2018 when I took delivery of my new 2018 expedition which I paid for.

BTW, most people never own a car on a purchase either. You don't own a car until the loan is paid off and there is no lean on it, most trade their cars before that ever happens. Leasing is just an alternative form of financing.

I am not a Dave Ramsey guy. But he’s got financing right. It’s a suckers deal.

We can all argue back and forth. The gist is that on occasion a lease might save or make you money over buying. This isn’t the normal outcome. At all. No matter what you think. The guys who absolutely are convinced they made a killing aren’t actually making a killing usually. Being adamant isn’t the same as being correct.

The smart play is buy a car with cash and put away the “payments” so that you pay cash the next time as well. Once you get off the car payment merry go round you will never go back.

Leasing sounds attractive to people who have to have new cars and people who actually believe car payments are just a way of life. They aren't. Learn that early on and save yourself a fortune. Not only are cars not an investment they are a money sink. If you are addicted to the smell of new cars or the newest and greatest then will either need to be wealthy or you will always have car payments. If you just love cars then it’s an acceptable cost.

Financing is a hellhole to be avoided at all costs. Sometimes you get the magical 0 percent but short of that financing is for suckers. There is no upside to financing a product that is constantly and impressively losing value.

When my oldest daughter was in her late 20's, We cosigned on a VW bug. Her lease was for 39 months at 1,000 miles per month. The car was junk, had a new engine put in half way through her lease. She turned it in at 36 months but paid the full 39 month lease. When she turned it in she had 37,000 miles on it. VW finance called us and said she went over the mileage and wanted more money. We explained she paid the full 39 months of lease, but they kept saying we went over the mileage. We told them since the 39 months were not yet up, bring back the car and it can sit in the driveway. They finally saw that they were idiots and said we didn't owe them anything.

quote:

Originally posted by jhe888:
Don't. Unless you can expense the payments as deductible business expenses, buying is financially better. You need to be using the car in your business to be able to expense it.

Even then it seldom makes sense. Remember that whole depreciation expense thingy.