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Well you have the option to complete the purchase but the real benefit for leasing is a set depreciation level for the term. Being entirely against leading is the wrong approach imo, if you understand how they work, negotiate the deal just like you would a straight purchase it can be a suitable option.
I think this is the most important point. Many people fail to realize most leases are negotiable just like if you were financing and just because it says $3600 Down and $329/mo lease does not mean you are stuck with those numbers.
Here are the two flaws in your analysis, which are common to pretty much everyone who favors leasing:
1. You shouldn't get a new car just because you want one or "you're ready for something different". Especially since the OP already has too much credit card debt, turning cars over is not a good use of money. Buy a car when you need one, not when you want one.
2. Don't assume you will always have a vehicle payment. Even if you aren't paying cash for a vehicle (and I do not subscribe to the position that says you must always pay cash), once you buy a car the ideal spot to be is that time when the car is still reliable and you don't have a payment. Cars work well and are reliable for a very long time now. Even if you have a thousand dollar repair every year that's still a lot cheaper than three or four thousand dollars a year in car payments.
if everyone thought that way car sales would drop 90% over night I have purchased things due to want vs need but that doesn’t make me irresponsible, just human
I've never leased a car, as I stated, I prefer buying a slightly used car and keeping it for a long time.
However, my retired mother in law always leased a new Camry LE every 2 years for the final 16 years of her life.
For her it made sense because:
- she could get into a new car for zero down and did not need to sell her stocks to buy a car
- she was always driving a new car and she enjoyed having the latest features
- it was always under warranty so she never had to buy a tire or a battery or deal with being stranded
- the deal included free oil changes and coffee at the dealer service dept
- she drove fewer than the allocated 10K miles per years
- she had a predictable, stable payment.
- she had plenty of money and chose to spend it that way
A lot of people with stable, predictable incomes prefer to lease.
if everyone thought that way car sales would drop 90% over night I have purchased things due to want vs need but that doesn’t make me irresponsible, just human
Were you up to your eyeballs in debt when you made that “want” purchase? That’s the point some of us are trying to make.
When it comes to spending money, not everything in life depends on whether its a “good investment” or not.
People take vacations with the family every year or even a few times a year. Do you call that “throwing money down the toilet?” People take trips because they enjoy it. Same for some people when it comes to car purchases. Some people (believe it or not) actually like driving cars that they enjoy and dont mind spending a little extra to accomplish that. Not everyone looks at vehicles as an A-B applicance. A lot of guys that I know are actual car enthusiasts who have a few cars or spend tons of money on what they enjoy doing.
It’s like the guys who spend money every week on beer and cigarettes yet think I’m dumb for carrying a car payment for a new car every 3yrs.
It’s like the guys who spend money every week on beer and cigarettes yet think I’m dumb for carrying a car payment for a new car every 3yrs.
Both are dumb.
Unless one has all debts paid, a fully funded retirement, college paid for family, and either was born with a silver spoon or makes a very high salary.
Unless one has all debts paid, a fully funded retirement, college paid for family, and either was born with a silver spoon or makes a very high salary.
No kids nor do I plan on having any. Healthy savings and retirement fund. I do pretty well for myself financially. Yes I have some debt but its manageable debt that can be taken care of any any given time. Why use my liquid cash if I can use someone else’s for pennies on the dollar? I’m completely OCD about my credit and have always maintained a score above 750.
Tell me how having a $300/month car payment is dumb? I drive a new car that is always covered under warranty and if an issue does occur, I can drop it off and given a loaner until my car is ready.
Can I buy a used car and save that $300/month? Sure, but I dont want to, nor do I need to. I can afford it without effecting my savings/retirement, so why not?
Considering I dont have any child expenses, I’d say I’m ahead.
If you are financially comfortable and completely savvy about every element of the deal, leasing might make sense. In general, though, the people asking questions about leases are anything but - they are financially shaky, carrying too much debt and trying to find a way to get a pricey new vehicle at the lowest OOP cost. And that's the only reason auto leasing went from a back-room business and fleet thing to a primary sales tool - to get people out the door with far more vehicle than they can really afford. (Because they've been conditioned into believing it's their right, and little else.)
The ones asking aren't addressing the right question, and they aren't usually in a position to even pretend to negotiate with a dealer for some imaginary better deal on the lease (or a purchase, for that matter - but leases are multiple times more difficult).
So discussing it as an absolute rule - never lease a vehicle - makes complete sense, because most people trying to get answers aren't economically savvy enough to understand a complex argument about the hidden costs, credit loading etc. (and, frankly, need an expensive new car like they need a butler).
In the end, though, the question is not financial or economic but (programmed) desire: "Why EXACTLY do you think you need a brand new car?" - and the answer rarely boils down to anything better than "Cuz I want one!" Can you genuinely afford to throw away that money on perpetual new-car smell? Fine. You're thanked and excused and go with God. For the other 98% of us, leasing is a bad deal often piled on top of other debt, all for (very likely) too much car at too much total cost, not even counting dealer gouging and pile-ons... or, heaven help them, going past lease terms in mileage or other costly errors.
I've been well-off enough not to sweat things like car payments and I usually solved the problem by simply paying cash. I am at a slightly lesser tier now but could drive home today any non-exotic car sold in the US on pretty much any terms I wanted - even cash. But I still wouldn't lease a car under any circumstances; it's a rigged game for suckers who think having a lot of car that wafts new-car-smell down the street is a worthy goal.
When you can't pay your existing debts and have a financial future that's uncertain if not downright bleak, leasing a car is tying yourself to a boat anchor and pretending you own a yacht.
No kids nor do I plan on having any. Healthy savings and retirement fund. I do pretty well for myself financially. Yes I have some debt but its manageable debt that can be taken care of any any given time. Why use my liquid cash if I can use someone else’s for pennies on the dollar? I’m completely OCD about my credit and have always maintained a score above 750.
Tell me how having a $300/month car payment is dumb? I drive a new car that is always covered under warranty and if an issue does occur, I can drop it off and given a loaner until my car is ready.
Can I buy a used car and save that $300/month? Sure, but I dont want to, nor do I need to. I can afford it without affecting my savings/retirement, so why not?
Considering I dont have any child expenses, I’d say I’m ahead.
It would be helpful to the OP if people would respond to the OP, not to hypotheticals.
Note what I have put in boldface above.
Having a $300/month payment, if you are in the position of the OP (between what he states, and reading between the lines, not a pot to p^$$ in and a bunch of credit card debt), is a bad idea if there's any way to keep the old car going while you work on that 18% credit card debt.
There are a whole bunch of things that I do, being in my mid 50s with a healthy income, good net worth, and no debt, that are emphatically not recommended for someone in their 20s (my guess) in the OP's stated position.
When it comes to spending money, not everything in life depends on whether its a “good investment” or not.
People take vacations with the family every year or even a few times a year. Do you call that “throwing money down the toilet?” People take trips because they enjoy it. Same for some people when it comes to car purchases. Some people (believe it or not) actually like driving cars that they enjoy and dont mind spending a little extra to accomplish that. Not everyone looks at vehicles as an A-B applicance. A lot of guys that I know are actual car enthusiasts who have a few cars or spend tons of money on what they enjoy doing.
It’s like the guys who spend money every week on beer and cigarettes yet think I’m dumb for carrying a car payment for a new car every 3yrs.
When you don't have any assets and you're deep in the hole, you don't get to spend your money just any way you want to.
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