Well, is it?

If you have money to burn and you're hard as Hell on auto-mo-biles and you plan on getting a new car every couple of years.

Haven't looked deep into it - but I think I remember from several years ago .... If you want to drive a new vehicle every few years (like Para said). And I think monthly payments are lower. Although as a financial benefit, this will depend on how much up-front $$ you have to put out.

I don't recall any other pluses to leasing.

Rick

I can think of a couple of times when it's a good idea.

Business use, where lease payments are deductible, and you don't want to tie up capital or credit.

In my case, I'm thinking of leasing my next vehicle for personal use. At my age, I don't expect to be driving too much longer. It's very likely that my wife will outlive me, and if I bought a vehicle, she would be left with the hassle of disposing of it. A leased vehicle could just be returned. "The rest of the payments? Nah, he's dead."

Never made sense to me ¯\_(ツ)_/¯

Then again: I've never felt the need for a shiny new motor vehicle every two or three years.

quote:

Originally posted by V-Tail:
"The rest of the payments? Nah, he's dead."

Best check your state's laws. I believe in some states the surviving spouse may become responsible for the balance of the obligation?

Here ya go: Is My Spouse Responsible for My Car Lease When I Die?

I think a lot of people choose to lease in the mistaken belief that major repairs, etc. are the responsibility of the lessor. And many more that are attracted by the somewhat lower monthly outlay, that even then, they have a hard time disgorging. These are the same people who think that scheduled maintenance is a waste of money.

quote:

Originally posted by V-Tail:
I can think of a couple of times when it's a good idea.

Business use, where lease payments are deductible, and you don't want to tie up capital or credit.

In my case, I'm thinking of leasing my next vehicle for personal use. At my age, I don't expect to be driving too much longer. It's very likely that my wife will outlive me, and if I bought a vehicle, she would be left with the hassle of disposing of it. A leased vehicle could just be returned. "The rest of the payments? Nah, he's dead."

The leasing for business does make sense. Still when I had my business purchasing worked out better finically in some years. When we where growing rapidly, we need exemptions to offset the accelerated income and a purchase of certain qualifying vehicles was 100% deductible at the time of purchase. This saved us a lot. Later on we did a few short term leases and just wrote off the payments which worked out better.

For me personally, I don't ever see myself leasing. Both mine and my wife's late model vehicles were purchase and are without leans. We're low mileage drivers, so I expect we can keep these to that final day. If I go, she'll get a very good return on my Tacoma, so I don't worry there.

I've been leasing for over 30 yrs. Sometimes a 2yr lease or sometime a 3yr lease.

I have not bought brakes, tires etc or had to pay for any car repairs in that time period. I change the oil every 5000 miles and put gas in it.

Monthly payments are cheaper than buying. Drawback for some is that you always have a monthly car payment. It's a monthly budgeted item for me, so it's part of my monthly bills.

I like leasing. It's nice having a new vehicle every 2 or 3 yrs.

The leases I am aware of all have substantial penalties for exceeding an already low and arbitrary annual mileage, and for every little stain or scratch. That kills leasing for me.

quote:

Originally posted by Rick_Perry:
Monthly [lease] payments are cheaper than buying.

In 2017 I bought my very-low-mileage 2015 Jeep Grand Cherokee. My payments were $500/mo. for 60 months. It was paid-off in November. That means I'm already $2,000 ahead.

If I maintain it well I will continue to realize $6,000 a year in savings, less maintenance and repair costs. I can buy a lot of maintenance and repair for $6k/year.

Meanwhile, the cost for leasing a 2023 JGC is over $500/month.

For some maybe, but every car I have bought, I bought for the long haul. Like some have said, for a business, I can absolutely see the benefit but for the average person, it seems like a lose/lose-(you own nothing / are only renting at a lower rate), situation.

It can be

If the residual is high

Make damn sure you won't go over the mileage

Check your states laws regarding sales tax, most only tax the monthly payment, some want full value tax up front which sucks donkey balls in a lease

There are also open ended leases for business/commercial use that can be beneficial if done right, all retail leases are closed end

Let me add; I like the feeling that it's mine, even if there's a lean on it. Similar to living in your house vs renting a house. Are you really going to take a great deal of pride in a rental house?

Now ponder... Do leasing companies make money? you bet the do and it's the leasers that are paying. And if there's kick back from dealerships that just goes to show you how much they rake in.

When I discuss leases, the first thing I point out is that leases are just a complicated process for buying a vehicle. When you “lease” a vehicle, you are signing a purchase contract. The Lease has a special ability to choose to return the vehicle after a Negotiated period of time.

So if you are interested in purchasing a vehicle but not sure about the cost of ownership, a lease is a good way to approach that purchase.

Some manufacturers allow purchase of the vehicle at the end if of the lease contract at current Market price (vice the contract Residual price). BMW used to allow this process but have since closed this loophole.

Again, if you are already interested in purchasing a vehicle; sometimes the incentives are better for leasing than purchasing. A manufacture may also set a very high Residual in an attempt to attract leasing.

You can negotiate the purchase price, interest rate (money factor in lease language), duration of lease and mileage. The duration and mileage are more about choosing the
combination that works for your situation vice a negotiation. But they do affect the Residual.

My background is in leasing BMW’s and once with Land Rover.

I was once at an exotic car dealership speaking to the owner of a leasing company who happened to be in town and visiting with the dealership owner. When he introduced himself and told me what he did I was flabbergasted. People lease super cars?

Apparently, a lot of them do and if done right is an outstanding investment opportunity. This of course assumes the car appreciates in value during your lease period. Probably doesn't hold true very often in the regular car market, but I could see where there was potential in their world.

Yes, in certain circumstances, such as, you are a business OR you need a vehicle to impress others that you don't have the cash to buy, such as a Realtor who needs to have a "success vehicle" but may not be in a position as a young agent to buy or finance outright.

They can be if you are a low mileage driver. If not, you better negotiate the residual price like you are buying.

Also - a lot have been making money buying out their lease then reselling in this crazy market.

quote:

Originally posted by a1abdj:
I was once at an exotic car dealership speaking to the owner of a leasing company who happened to be in town and visiting with the dealership owner. When he introduced himself and told me what he did I was flabbergasted. People lease super cars?

Apparently, a lot of them do and if done right is an outstanding investment opportunity. This of course assumes the car appreciates in value during your lease period. Probably doesn't hold true very often in the regular car market, but I could see where there was potential in their world.

It does, and there is another angle to it as well. I knew a guy who was a Ferrari guy. He was a very successful jeweler who had owned a bunch of them. As such, he was eligible to buy new rare cars, which often have the restriction that the buyer be a prior Ferrari owner. For example, the Enzo. A buyer couldn't buy an Enzo if you weren't a prior Ferrari owner. Plus, he was willing to plonk down $250k to get on the waiting list. He would place the deposit, wait the time, buy the car for cash when it came in, drive it for 6 months, and then sell it for a nice profit to a new money person who wanted it right now.

Good business if you have the cash.

My daughter has leased for years. She is single and does some road travel for work, plus a lot of trips to the airport for work flights. For her, having a reliable, new car that is always under warranty is worth it. Like she says "I can afford the lease payment - I cant afford the repairs."

For personal use and you like a new car regularly and don't want the hassle of selling the old car yourself, and you don't mind the higher overall cost of leasing over buying, then yes, leasing is a good idea.

From strictly a financial point of view, leasing is not a good idea for personal use when looking at the total cost of ownership for the useful life of the vehicle.