The lease vs. buy debate (accounting types?)
01-03-2010, 01:02 AM
#18
Rennlist Member
I did this debate when I bought my car. It ALL depends on your situation.
Lease has the following advantages:
- Can return it in case of major accident [big plus for Porsche]
- Can write off the interest if you are self employed, or buying part of a business
- Much easier to trade-in to another car when lease expires (no hassle of trying to sell)
- The chance that today's depreciated assumed value of the car is higher than actual (imagine if your lease expired in 2009, probably buy-in was higher than what you could get for the car)
- Lower monthly payments in general
Finance advantages:
- Generally (not always) better interest rates
- Overall lower cost of ownership (if car is held for long)
- More flexibility for changing cars (no waiting for lease to expire)
- No lease terms in regards to how you mod a car, milage you drive, etc...
It all depends on your situation. I think in general, if you can ride off Lease taxes, lease is the best option. If not, then you gotto do some calculations, for me, it turned out that by financing though my Line of credit, it was a much cheaper option as I couldn't ride off the lease payments.
I believe Suzy Orman always advises against lease.
Lease has the following advantages:
- Can return it in case of major accident [big plus for Porsche]
- Can write off the interest if you are self employed, or buying part of a business
- Much easier to trade-in to another car when lease expires (no hassle of trying to sell)
- The chance that today's depreciated assumed value of the car is higher than actual (imagine if your lease expired in 2009, probably buy-in was higher than what you could get for the car)
- Lower monthly payments in general
Finance advantages:
- Generally (not always) better interest rates
- Overall lower cost of ownership (if car is held for long)
- More flexibility for changing cars (no waiting for lease to expire)
- No lease terms in regards to how you mod a car, milage you drive, etc...
It all depends on your situation. I think in general, if you can ride off Lease taxes, lease is the best option. If not, then you gotto do some calculations, for me, it turned out that by financing though my Line of credit, it was a much cheaper option as I couldn't ride off the lease payments.
I believe Suzy Orman always advises against lease.
01-03-2010, 10:49 AM
#19
Three Wheelin'
Suzy Orman? Seriously? The Dr. Phil of financial advice. There's no one size fits all. You have to get out your spreadsheet and do the math. And get out your crystal ball and try to guess whether any money you keep aside will grow or shrink in the next few years.
I think my dad had it right: buy a two year old car, cash; no finance charges, biggest depreciation is done, car is still new enough to last a while - then repeat as necessary. I have never had the discipline to do that, but on paper, it is the sensible thing to do.
I think my dad had it right: buy a two year old car, cash; no finance charges, biggest depreciation is done, car is still new enough to last a while - then repeat as necessary. I have never had the discipline to do that, but on paper, it is the sensible thing to do.
01-03-2010, 01:12 PM
#20
Three Wheelin'
Suzy Orman? Seriously? The Dr. Phil of financial advice. There's no one size fits all. You have to get out your spreadsheet and do the math. And get out your crystal ball and try to guess whether any money you keep aside will grow or shrink in the next few years.
I think my dad had it right: buy a two year old car, cash; no finance charges, biggest depreciation is done, car is still new enough to last a while - then repeat as necessary. I have never had the discipline to do that, but on paper, it is the sensible thing to do.
I think my dad had it right: buy a two year old car, cash; no finance charges, biggest depreciation is done, car is still new enough to last a while - then repeat as necessary. I have never had the discipline to do that, but on paper, it is the sensible thing to do.
01-03-2010, 09:10 PM
#21
Rennlist Member
Suzy Orman? Seriously? The Dr. Phil of financial advice. There's no one size fits all. You have to get out your spreadsheet and do the math. And get out your crystal ball and try to guess whether any money you keep aside will grow or shrink in the next few years.
I think my dad had it right: buy a two year old car, cash; no finance charges, biggest depreciation is done, car is still new enough to last a while - then repeat as necessary. I have never had the discipline to do that, but on paper, it is the sensible thing to do.
I think my dad had it right: buy a two year old car, cash; no finance charges, biggest depreciation is done, car is still new enough to last a while - then repeat as necessary. I have never had the discipline to do that, but on paper, it is the sensible thing to do.
01-03-2010, 09:55 PM
#22
Suzy Orman? Seriously? The Dr. Phil of financial advice. There's no one size fits all. You have to get out your spreadsheet and do the math. And get out your crystal ball and try to guess whether any money you keep aside will grow or shrink in the next few years.
I think my dad had it right: buy a two year old car, cash; no finance charges, biggest depreciation is done, car is still new enough to last a while - then repeat as necessary. I have never had the discipline to do that, but on paper, it is the sensible thing to do.
I think my dad had it right: buy a two year old car, cash; no finance charges, biggest depreciation is done, car is still new enough to last a while - then repeat as necessary. I have never had the discipline to do that, but on paper, it is the sensible thing to do.
Dave
