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Old 01-11-2016, 06:02 PM
 
11,932 posts, read 20,383,027 times
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Quote:
Originally Posted by Vision67 View Post
In retirement you know 2 things that make the lease/buy decision easier:

1. You likely have a predictable income from pension/SS and you no longer worry about layoffs.
2. You likely drive fewer miles, e.g. 10K per year.

As such, it's easy to calculate lease costs. The benefit of leasing a new car every 3 years is that the car is never out of warranty, it's easy to trade for a new one every 3 years and you get the latest safety equipment.

Does it cost more than buying? Likely, but who cares?
Because I am married, and we are a two car family, owning works for me. But my sister, who lives alone, and needs a reliable car, leases.

I agree with her decision. And if I lose my husband, it's the one I would make.
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Old 01-11-2016, 06:16 PM
 
2,563 posts, read 2,789,776 times
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Quote:
Originally Posted by ukgirl49 View Post
I have my lustful eyes on a new BMW 3 series. Mine is 4 years old and out of warranty. To lease or not?

In general terms does leasing make sense in retirement?
What makes sense depends on your income level. Personally, I can think of more fun things to spend money on than BMW payments. The cars aren't that much fun.
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Old 01-11-2016, 06:45 PM
 
Location: Central Massachusetts
4,800 posts, read 4,845,678 times
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My plan for a retirement vehicle is going to be one very nice Cobalt Cuddy Cabin Cruiser. I know that a lot of you are going to say that a boat is a big hole in the water to pour money into. But for those who think that way I thank you for that thought but I know exactly nothing on when I will check out so I plan to enjoy my time and if I can I will compromise nothing and get the very best.
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Old 01-14-2016, 12:35 AM
 
Location: Florida Gulf Coast
4,404 posts, read 5,922,685 times
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Quote:
Originally Posted by AlaskaErik View Post
I've turned down close to $20,000 of extended warranties over the years. My unanticipated repairs during that time...about $300. None of those repairs were for Kia or Hyundai. Even Consumer Reports calls extended warranties a bad deal.
Way to not get the point.
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Old 01-14-2016, 12:45 AM
 
Location: Florida Gulf Coast
4,404 posts, read 5,922,685 times
Reputation: 7121
Quote:
Originally Posted by ukgirl49 View Post
I have my lustful eyes on a new BMW 3 series. Mine is 4 years old and out of warranty. To lease or not?

In general terms does leasing make sense in retirement?
You will not get much support on the question of leasing v. buying, especially on a luxury car and in retirement. Some people think you should drive the car to death and that's OK for people who don't mind driving a 15-year-old car. If you can afford it and can build the lease payment into your long-term budget, I think it's fine. So what if you don't own anything at the end of the lease? You lease a new car! You never have any repair costs because the car's under warranty the whole time. You do have to look at the mileage issue -- too many miles, you pay overage charges; too few miles, you're giving them back a car on which they'll make a huge profit. But so many people on here think we're all idiots and don't understand how leasing works -- people have been leasing cars since the 80's, it's pretty much the norm for a lot of folks and that includes retirees.
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Old 01-14-2016, 12:50 AM
 
Location: Florida Gulf Coast
4,404 posts, read 5,922,685 times
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Quote:
Originally Posted by dmarie123 View Post
I usually lease. I drive about 7k miles a year so I never worry about going over my miles. In fact, my last lease I MADE money. What do I mean by that? I got a great lease deal (yes, you can negotiate and negotiate on the price of your trade) and because I only drove about 4k miles that first year, my car was worth MORE than I owed after a year. I traded it in for the same car, more features, year newer model, and it dropped my payments because I had positive equity in the lease. Yes, you can have equity in a lease.

I'll use dumb numbers for ease of math....say your lease is $100 a month, and your residual is $1000. (Residual is the cost to buy the car at the end of the lease).... for a 36 month lease that is $3600 in lease payments and another $1000 to buy the car. For a grand total of $4600 to buy the car at the end of the lease if you want. If the car has a sticker of $7000 that is a GREAT deal. If the car has a sticker prices of $3000 that is a horrible deal.

Leases on cars like BMW and Audi aren't always worth it. The lease payment is often VERY high. Lease payments depend on depreciation. If a car is going to depreciate FAST, the lease payment are high. The dealer has to sell it as a used car at the end of your lease if you don't buy it. So, if they know they can't sell it for much, they will charge you way higher lease payments so they come out on top. If you lease a car that holds its value relative to it's sticker price, you get way smaller lease payment than if you'd buy because the dealer knows they can make money on the back end.

I almost leased an Audi SUV the lease payment was going to be higher than the payment to buy because of expected depreciation relative to sticker price. My current lease is on a decked out Ford. Sticker Price is $52K and the payments would have been crazy if I'd have bought ($1500 a month for a 36 month note). The Lease is just at $450 a month because It's a low mileage lease and Ford expects to be able to make money selling it as a used car.

Just make sure you ask about the residual. The residual on my Ford is $26,000 so I can buy it for $26000 at the end of my lease if I want. That's a grand total of $42,000 in payments+ Residual on a $52,000 car. Way better deal/option than buying first, in my opinion
.
So what did you put down on the Ford lease to allow you to get a $450 payment on a $52K vehicle?
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Old 01-14-2016, 07:40 AM
 
13,891 posts, read 7,395,585 times
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Quote:
Originally Posted by AlaskaErik View Post
I've turned down close to $20,000 of extended warranties over the years. My unanticipated repairs during that time...about $300. None of those repairs were for Kia or Hyundai. Even Consumer Reports calls extended warranties a bad deal.
That's like saying "I know people who have spent thousands of dollars on life insurance. I opted out even though my family would starve to death if I died. I haven't died yet so I made the right decision."

I buy the mechanical insurance. In my lifetime, I'm way ahead of the game. The 7 year/100k OEM extended warranty I bought last March was $1,400. It's dirt cheap peace of mind.

If you drive simple stripped econoboxes, sure. Since Consumer Reports hates cars, that's what they advocate buying. My car has all the expensive to repair gizmos like adaptive cruise control that can and do break. Enjoy that Hyundai.
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Old 01-14-2016, 09:51 AM
 
Location: Northern IL
241 posts, read 226,730 times
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Quote:
Originally Posted by GeoffD View Post
That's like saying "I know people who have spent thousands of dollars on life insurance. I opted out even though my family would starve to death if I died. I haven't died yet so I made the right decision."

I buy the mechanical insurance. In my lifetime, I'm way ahead of the game. The 7 year/100k OEM extended warranty I bought last March was $1,400. It's dirt cheap peace of mind.

If you drive simple stripped econoboxes, sure. Since Consumer Reports hates cars, that's what they advocate buying. My car has all the expensive to repair gizmos like adaptive cruise control that can and do break. Enjoy that Hyundai.
Well said.
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Old 01-14-2016, 11:09 AM
 
Location: Wasilla, AK
7,240 posts, read 4,132,331 times
Reputation: 15639
Quote:
Originally Posted by GeoffD View Post
That's like saying "I know people who have spent thousands of dollars on life insurance. I opted out even though my family would starve to death if I died. I haven't died yet so I made the right decision."

I buy the mechanical insurance. In my lifetime, I'm way ahead of the game. The 7 year/100k OEM extended warranty I bought last March was $1,400. It's dirt cheap peace of mind.

If you drive simple stripped econoboxes, sure. Since Consumer Reports hates cars, that's what they advocate buying. My car has all the expensive to repair gizmos like adaptive cruise control that can and do break. Enjoy that Hyundai.

Apples and oranges comparison. And I do enjoy the Hyundai. It also has adaptive cruise control and all the other safety technology like lane departure warning, blind spot monitoring and rear cross traffic alert. It also comes with a warranty. Why should I pay for a second warranty. It wouldn't give me any extra piece of mind, but it would put a big hole in my wallet. Not that I couldn't afford it. But insurance for possessions, is for the most part, a ripoff. If I added up all the insurance I've declined on possessions, it would be closer to $50,000. I've taken my chances and I'm way ahead. And the asset side of my balance sheet is $50,000 higher.
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Old 01-15-2016, 06:37 AM
 
12,705 posts, read 9,967,478 times
Reputation: 9515
Generally, leasing works if your plans match well with the terms (both how long you intend to keep the car and how many miles you're going to drive each year). Otherwise, buy. Oversimplified but a rule of thumb nonetheless if you don't want to do complicated math...
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