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I understand exactly how leases work. The point that I was trying to make is that at the end of the lease, you either lease again or have no vehicle. At the end of buying a car or making a repair, you still have transportation. You have no option at the end of the lease but to turn it in or buy it. That's not the same with one you bought.
Again - you don't get it. You simply don't understand how leases work. Pretty much every word of your post is incorrect.
While I was cruising city-data forums I ran across this post that is the very best advice I ever read anywhere about worry free car/truck ownership. So much worry free common sense in a few words......
I quote....
By...Electrician4you
"I drive the hell out of my cars. My work truck is a chevy. I just rebuilt the transmission. For me to buy a equivalent new truck would run me about 40k or about 20 for a 5-6 year old one. I rebuilt the trans for $1750. It's. CHEAPER to repair a vehicle than to buy a new one. I don't care what anyone says. No vehicle s ever gonna have a 20-40k repair. My truck may not be worth more than 5k but the replacement cost is way more than repair cost. What a vehicle is " worth " should not be part of the equation. You need to use the replacement cost
My Last truck was a GMC. It's currently driven by a friend. It has 370,000 miles on the original motor that has never been touched internally. So those heavy 350s can go for a long time
If I were you I would just drive it. Maybe paint the hood as long as you maintain it, fix things when they break it will go forever . When the motor craps out throw another 350 in it and enjoy it or another 250,000 miles
My work truck has 193,000 miles on it. My personal truck is a 99 desel and I expect 500,000 out if it before I start looking into rebuilding it. Don't waste money on cars. Go buy property or invest in mutual funds. Much more rewarding than a new car. Buying new cars is never a good investment"
Folks that are under the gun with car debt could learn much from this post to make their life more worry free. I've been car debt free for 25 years now and it's great!!
Those seems like two pretty good options. If you get a good enough lease deal (do your research) you are now empowered to make the best decision for you when the lease is up. It's not like if you end up terminating the lease and giving back the car there are no other cars for you to purchase/lease and have to walk the rest of your life.
Turn it around and say you finance a car and it turns out to be a dud. Issues all around. Now you're stuck with it and you know you'll lose money on it if you sell due to all the issues. If you had leased it after 3 years you simply hand over the keys and walk away. No additional out of pocket because it was under full mfg warranty anyways. It cuts both ways.
Leasing:
Beginning of the lease - pay a down payment
During the lease - monthly payment
End of lease - Buy the car or turn it in and walk away (meaning you have to lease again or go buy another car).
Every step of the lease process costs you money out of pocket.
Buying a car:
Beginning of ownership - Pay for the vehicle
During ownership - pay for repairs (if they are needed... if not, bank the money)
At the end of ownership - Sell the vehicle
Using a vehicle costs money one way or another. No argument there. But it is the amount of money required.
Financing a car and it turning out to be a dud is a possibility, but it isn't the norm. So there stands a much better chance that (if properly maintained and you did your homework up front) at the end of 3 years the car will still be driveable and in good working order. Is it more of a gamble? Yes. But the house doesn't always win in this situation. The house always wins in the lease.
The way a lease works never changes. You are guaranteed to have to spend more money to buy it or turn it in and go buy/lease another. You are paying for peace of mind. Nothing more. That is a luxury that some (especially those living from paycheck to paycheck) cannot always afford.
I have done the math numerous times to come to the decision that leasing isn't the best option (in my scenario). I'm not just pulling it out of left field. We can go as far as to break the math down using real world examples if you'd like.
Never mind the theoretical manipulations that purport to show how leasing a car is the smart financial decision. Y'all are largely forgetting two issues that determine the end of life of automobiles.
In the North, rust. It's not just about holes in the body panels, because those can be fixed. It's about every single fastener gradually becoming impossible to loosen or tighten. It's also about electrical grounds corroding and leading to intermittent electrical failures.
In the Southwest and Texas, it's embrittlement of plastics due to heat and UV from the sun. I had a 20 year old car that ran like new, but every time you pushed on an interior part made of plastic, it would either shatter or explode into dust. You just can't afford to replace everything made of plastic as it breaks. Don't forget how much of the mechanics of a car is made of plastic these days, as well, so it's not just a matter of the interior looking shabby. Also don't forget all the rubber seals that embrittle due to sunlight and ozone.
My gut feel is that for a daily driver, somewhere between 20 and 30 years is kind of the limit for service life, except in unusual cases, considering the effects of rust and the inevitable degradation of plastics.
Leasing:
Beginning of the lease - pay a down payment
During the lease - monthly payment
End of lease - Buy the car or turn it in and walk away (meaning you have to lease again or go buy another car).
Every step of the lease process costs you money out of pocket.
Buying a car:
Beginning of ownership - Pay for the vehicle
During ownership - pay for repairs (if they are needed... if not, bank the money)
At the end of ownership - Sell the vehicle
Using a vehicle costs money one way or another. No argument there. But it is the amount of money required.
Financing a car and it turning out to be a dud is a possibility, but it isn't the norm. So there stands a much better chance that (if properly maintained and you did your homework up front) at the end of 3 years the car will still be driveable and in good working order. Is it more of a gamble? Yes. But the house doesn't always win in this situation. The house always wins in the lease.
The way a lease works never changes. You are guaranteed to have to spend more money to buy it or turn it in and go buy/lease another. You are paying for peace of mind. Nothing more. That is a luxury that some (especially those living from paycheck to paycheck) cannot always afford.
I have done the math numerous times to come to the decision that leasing isn't the best option (in my scenario). I'm not just pulling it out of left field. We can go as far as to break the math down using real world examples if you'd like.
That's why you negotiate a lease just like a purchase. You should never put a down payment on a lease.
If you did that's on you.
And I'm not even pro lease. I prefer financing but I understand people have different situations and needs.
While I was cruising city-data forums I ran across this post that is the very best advice I ever read anywhere about worry free car/truck ownership. So much worry free common sense in a few words......
I quote....
By...Electrician4you
"I drive the hell out of my cars. My work truck is a chevy. I just rebuilt the transmission. For me to buy a equivalent new truck would run me about 40k or about 20 for a 5-6 year old one. I rebuilt the trans for $1750. It's. CHEAPER to repair a vehicle than to buy a new one. I don't care what anyone says. No vehicle s ever gonna have a 20-40k repair. My truck may not be worth more than 5k but the replacement cost is way more than repair cost. What a vehicle is " worth " should not be part of the equation. You need to use the replacement cost
My Last truck was a GMC. It's currently driven by a friend. It has 370,000 miles on the original motor that has never been touched internally. So those heavy 350s can go for a long time
If I were you I would just drive it. Maybe paint the hood as long as you maintain it, fix things when they break it will go forever . When the motor craps out throw another 350 in it and enjoy it or another 250,000 miles
My work truck has 193,000 miles on it. My personal truck is a 99 desel and I expect 500,000 out if it before I start looking into rebuilding it. Don't waste money on cars. Go buy property or invest in mutual funds. Much more rewarding than a new car. Buying new cars is never a good investment"
Folks that are under the gun with car debt could learn much from this post to make their life more worry free. I've been car debt free for 25 years now and it's great!!
Warms this old mans heart.
Sorry old man (I'm using your words, would never call you old. lol) , i totally disagree.
My son had a 2008 nissan altima. piston blew cracking the engine block. repair cost 3500K for a salvage yard engine. NOw this gentlemen seems to know his way around an engine, I do not. I don't have the knowledge or the time to repair an engine (I make 82K a year at my job so yeah, my time is worth money).. Ok fixed the engine 8 months later, another break down mechanic wanted another 1500 for that repair.
Just purchased a leftover 2016 nissan sentra, no bells or whistle for the kid. Dealer gave me 3k for his trade and another 4 K in dealer incentives. took the price down to 10,000 dollars. we have a 3 year/36000 mile warranty plus a 5 year 50000 mile warranty on the power train.
It maybe cheaper each individual time but add up all those repairs over the next lets say 7 years he'll have the sentra and I'm willing to bet it will come close to the cost of a new one.
That's why you negotiate a lease just like a purchase. You should never put a down payment on a lease.
If you did that's on you.
And I'm not even pro lease. I prefer financing but I understand people have different situations and needs.
In a situation of someone with less than stellar credit, their chances of actually getting a zero down lease is slim to none. Every piece of fine print mentions 0% down WAC. Those folks don't have that option and since they are higher risk already, they're going to come out of pocket.
All you are doing with leasing (if anything) is kicking the can down the road. You still have to deal with coming up with larger sums of money. Leasing just guarantees that those lump sums are at the beginning of a lease.
With buying an older used car (in good condition) the gamble is that you spend it up front and hopefully go much longer than 36 months before you have to spend that lump sum again.
If you finance, it is much easier to get a 0% down loan (maybe at a higher interest rate though) without good credit so those people can still break the cost down into more manageable bites.
I get that leasing is for some people, but I just don't agree that it's smarter than buying a vehicle that you either own up front, or own after it's paid off. That's transportation that you have that doesn't require the hassle of turning in every so often to renegotiate again.
Look at this scenario:
Person A leases a car. $2,300 down, $200/month for 36 months. At the end of 36 months the lease cost them $9,500 or $263.88/month. When the car is turned in they have nothing tangible to work with. They either now go buy another vehicle, or lease another and repeat the cycle.
Person B finances a car. $0 down, $300/month for 36 months. At the end of 36 months the car cost them $10,800. They put $2k into the vehicle for maintenance in 3 years. NADA on the car is still $6,500. They sell the car for $6,000. They now have $6,000 in cash money to put towards another vehicle. Deduct the $2k in maintenance, and their cost of ownership for 3 years was $4,800, or $133/month.
In a situation of someone with less than stellar credit, their chances of actually getting a zero down lease is slim to none. Every piece of fine print mentions 0% down WAC. Those folks don't have that option and since they are higher risk already, they're going to come out of pocket.
All you are doing with leasing (if anything) is kicking the can down the road. You still have to deal with coming up with larger sums of money. Leasing just guarantees that those lump sums are at the beginning of a lease.
With buying an older used car (in good condition) the gamble is that you spend it up front and hopefully go much longer than 36 months before you have to spend that lump sum again.
If you finance, it is much easier to get a 0% down loan (maybe at a higher interest rate though) without good credit so those people can still break the cost down into more manageable bites.
I get that leasing is for some people, but I just don't agree that it's smarter than buying a vehicle that you either own up front, or own after it's paid off. That's transportation that you have that doesn't require the hassle of turning in every so often to renegotiate again.
Look at this scenario:
Person A leases a car. $2,300 down, $200/month for 36 months. At the end of 36 months the lease cost them $9,500 or $263.88/month. When the car is turned in they have nothing tangible to work with. They either now go buy another vehicle, or lease another and repeat the cycle.
Person B finances a car. $0 down, $300/month for 36 months. At the end of 36 months the car cost them $10,800. They put $2k into the vehicle for maintenance in 3 years. NADA on the car is still $6,500. They sell the car for $6,000. They now have $6,000 in cash money to put towards another vehicle. Deduct the $2k in maintenance, and their cost of ownership for 3 years was $4,800, or $133/month.
I'm not here to argue the math on lease vs finance. I am not a fan of leasing but understand where it might be useful. I know in most cases financing is better financially (big picture). But when money is tight and one can get a brand new car for $100-200/month I'm not going to fault them for going that route vs constantly paying to repair an old beater.
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