Lease v Finance
Drifting
Joined: Feb 2017
Posts: 3,025
Likes: 1,486
1. When you give the car back you will have paid more than what it has depreciated in the market
2. You have to maintain it as if you owned it and you get charged fees for wear/tear (new tires at trade in) and too many miles
3. interest rates / MF is usually much higher than market
but here we are with 80% of people in America doing it because thats what sophisticated people do haha
btw, 70% of people also live paycheck to paycheck
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Joined: Jul 2015
Posts: 893
Likes: 402
From: CANADA
Leasing isn't the worst financially. Leasing is honestly the best option. I've never faced any fees for buying the car out at the end. The only time I ever got a fee from leasing was when I didn't release another car from the same company. I believe it was Infinity at the time ( Remember the days when the G35x Was hot and not a pizza delivery car)
2. if you're giving it back to buy another vehicle, yes you may not pay a fee on paper, but you are paying whether you see it leaving your pocket or not. dealers love when you just hand them the car back, they'll mark it up immediately for sale. they make a nice profit and you have helped them do just that by paying more for the vehicle than it's worth over your lease term.
RL Community Team
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If you keep your miles under the lease you can have equity in it, and use that towards your next car if you get it though the same company. Even if you buy it out it may be worth more on paper then it is in your buyout agreement. I personally don't drive my cars at all so I'm always way under on the miles.
You can trade the car in anywhere to any dealer, some dealers will give you more then others.
You're also in less debt on paper when leasing. If your car is 130k vs the what you're paying in the lease that's a big difference. Allowing you to do more things.
Most cars are under warranty so you really only have to change the oil which you would do anyways.
This is just IMO. Leasing always has worked better for me then buying, I don't keep anything for long time unless I've made memories with it.
You can trade the car in anywhere to any dealer, some dealers will give you more then others.
You're also in less debt on paper when leasing. If your car is 130k vs the what you're paying in the lease that's a big difference. Allowing you to do more things.
Most cars are under warranty so you really only have to change the oil which you would do anyways.
This is just IMO. Leasing always has worked better for me then buying, I don't keep anything for long time unless I've made memories with it.
Rennlist Member
Joined: Aug 2017
Posts: 3,274
Likes: 1,172
From: 91North/75South
My accountant flipped out when I said I was going to buy my first Pan as a business car. Cars like these Dont qualify for 179 rapid depreciation. In essence you can only take $1500 a year depreciation so one of these cars will be an asset on the books for ever. Lease may be different but you will have to declare the annual lease value of the car as income. This is what I know about "company" cars.
Burning Brakes
Joined: Apr 2021
Posts: 1,211
Likes: 494
From: Southern California
If you keep your miles under the lease you can have equity in it, and use that towards your next car if you get it though the same company. Even if you buy it out it may be worth more on paper then it is in your buyout agreement. I personally don't drive my cars at all so I'm always way under on the miles.
You can trade the car in anywhere to any dealer, some dealers will give you more then others.
You're also in less debt on paper when leasing. If your car is 130k vs the what you're paying in the lease that's a big difference. Allowing you to do more things.
Most cars are under warranty so you really only have to change the oil which you would do anyways.
This is just IMO. Leasing always has worked better for me then buying, I don't keep anything for long time unless I've made memories with it.
You can trade the car in anywhere to any dealer, some dealers will give you more then others.
You're also in less debt on paper when leasing. If your car is 130k vs the what you're paying in the lease that's a big difference. Allowing you to do more things.
Most cars are under warranty so you really only have to change the oil which you would do anyways.
This is just IMO. Leasing always has worked better for me then buying, I don't keep anything for long time unless I've made memories with it.
As to your other point, isnt the fact that youd be below the mileage allotment of the lease, even more reason to buy than lease? The total lease payment (any down plus monthly payments) assumes you will drive x miles during the life of the lease. If you drive less than x miles, you wouldve still paid the same during the life of the lease. Yes, you may get someone to buy (or a dealer to offer a trade) that is above the lease-end buy-out amount at that point, but the money you wouldve already spent on the initial down/monthly payments wouldve been gone for good. If you compared that perceived equity with the equity you wouldve really had in your car if you bought it first and then put low miles on it and took care of it, youd see that youd still have more equity in the buying scenario than the lease scenario.
Last edited by SS22; Aug 16, 2021 at 07:13 PM.
Racer
Joined: Jul 2017
Posts: 261
Likes: 54
From: MA
My accountant flipped out when I said I was going to buy my first Pan as a business car. Cars like these Dont qualify for 179 rapid depreciation. In essence you can only take $1500 a year depreciation so one of these cars will be an asset on the books for ever. Lease may be different but you will have to declare the annual lease value of the car as income. This is what I know about "company" cars.
Drifting
Joined: Feb 2017
Posts: 3,025
Likes: 1,486
If you keep your miles under the lease you can have equity in it, and use that towards your next car if you get it though the same company. Even if you buy it out it may be worth more on paper then it is in your buyout agreement. I personally don't drive my cars at all so I'm always way under on the miles.
You can trade the car in anywhere to any dealer, some dealers will give you more then others.
You're also in less debt on paper when leasing. If your car is 130k vs the what you're paying in the lease that's a big difference. Allowing you to do more things.
Most cars are under warranty so you really only have to change the oil which you would do anyways.
This is just IMO. Leasing always has worked better for me then buying, I don't keep anything for long time unless I've made memories with it.
You can trade the car in anywhere to any dealer, some dealers will give you more then others.
You're also in less debt on paper when leasing. If your car is 130k vs the what you're paying in the lease that's a big difference. Allowing you to do more things.
Most cars are under warranty so you really only have to change the oil which you would do anyways.
This is just IMO. Leasing always has worked better for me then buying, I don't keep anything for long time unless I've made memories with it.
BTW, if you apply for a mortgage the monthly fleece payment will definitely come up in their approval process. It may not be a traditional liability but it is still a consideration similar to debt.
Burning Brakes
Joined: Apr 2021
Posts: 1,211
Likes: 494
From: Southern California
hmm
this doesnt really say why Fleeces are good financially, it actually says the opposite.
BTW, if you apply for a mortgage the monthly fleece payment will definitely come up in their approval process. It may not be a traditional liability but it is still a consideration similar to debt.
BTW, if you apply for a mortgage the monthly fleece payment will definitely come up in their approval process. It may not be a traditional liability but it is still a consideration similar to debt.
With the exception of potential business tax write-offs, Ive yet to hear someone explain how it makes financial/economic sense for someone who can actually afford buying a car with cash or financing to instead lease that same car. Im still as curious as ever to know!
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Racer
Joined: Jul 2017
Posts: 261
Likes: 54
From: MA
Burning Brakes
Joined: Apr 2021
Posts: 1,211
Likes: 494
From: Southern California
Far from offering non-competitive rates, often they offer rates that are much better than the market rate (like 0% or 0.99%) and many rate-conscious people fall for these rates. But theres never a free lunch. On the back end, they devalue your trade-in, mark up the price of the car, add fees, etc., and more than make up for their too-good-to-be-true rates. Basically, leasing and financing gives dealerships a lot of different ways to play the consumer. Im not saying financing is bad (certainly not as bad as leasing from a purely financial/economic point of view), but the best way to finance is to secure a loan from a lender other than through the dealer
And of course dont walk into the dealership saying youre paying cash (even if you are) until the very end after the price is finalized.
Burning Brakes
Joined: Apr 2021
Posts: 1,211
Likes: 494
From: Southern California
Thats true and Ive done it that way. If you really want to avoid the reporting, you can do a wire transfer or write a personal check, since those dont count as cash and are traceable to your bank account (the cash reporting requirement is to prevent money laundering).
RL Community Team
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Joined: Jan 2021
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Yep, lenders definitely treat lease payments as debt. But monthly lease payments are lower than finance payments (at least when financing 5 years or less and assuming same down payment in both scenarios) so it keeps the monthly debt to income ratio lower (as well your total debt since youd be on the hook for renting the car for 2-3 years as opposed to paying for the entire car). Particularly for people who nearly or totally max out their debt, thats one more (unwise) reason to leaseeven when they realize (and of course some dont) that they ultimately pay more, they think they pay less because theyre focused on paying a lower monthly payment. Similar fallacy occurs when paying way more upfront and during the life of the lease only to be offered a higher trade than the lease buyout, and suddenly the person thinks theyre getting extra money to use as down payment for their next lease, and so the cycle continues. Car makers/dealers make money off all of us (as they should, theyre not a charitable organization after all), but they make the most out of leases!
With the exception of potential business tax write-offs, Ive yet to hear someone explain how it makes financial/economic sense for someone who can actually afford buying a car with cash or financing to instead lease that same car. Im still as curious as ever to know!
With the exception of potential business tax write-offs, Ive yet to hear someone explain how it makes financial/economic sense for someone who can actually afford buying a car with cash or financing to instead lease that same car. Im still as curious as ever to know!
RL Community Team
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I think anything over 10k gets reported.