Buy a car ... lease a car (best, mileage, sell, Audi)

[DannyHobkins]

Originally Posted by kwong7

2 years after getting the Fiat, we bought a CPO 2013 Tesla Model S85 with just under 60K miles on it. We have 138K miles on it now along with about $10K of warranty work done including a drive unit, rear window defroster, HV contactors, pyro fuse, 12V battery, and TPMS retrofit. Car showed 256 miles of range when we bought it and it was software limited to 244 miles a few months later, then down to 236 a few years later. Tesla and other 3rd party garages have battery upgrades for ~$20K that will give about 60 miles of extra range and cut my fast-charging sessions in half. it's tempting.

2013 Model S is worth ~$12k private party, if you're going to drop $20k on a 60 mile battery upgrade, just get a newer Model S with 400 miles range for about $30k.

[YourWakeUpCall]

Leasing vs. financing vs. cash is just math. The only real variables are depreciation (which applies equally to all scenarios) and lost opportunity costs (most applicable to paying cash). When leasing, the lessor (the party issuing the lease) is betting that the residual value established at the beginning of the contract ends up being lower than the actual residual value and the buyer turns the car in. Theoretically, if the total cost to the lessee equals the depreciation, it's neutral from both the lessor and lessee's perspective.

[rabbit33]

Originally Posted by YourWakeUpCall

Leasing vs. financing vs. cash is just math. The only real variables are depreciation (which applies equally to all scenarios)...

Yes, and no. That's assuming that the car is never paid off and owned outright.

For an example, at one point I had a 17 year old car I was using daily. I hadn't paid a payment on it in 13 years. When the IRS was allowing 50 cents a mile I calculated my cost, including depreciation, and got something like 4.5 cents per mile.

Once you decide the vehicle's fully depreciated (7 years?) then everything after that's just gravy. Depreciation is an accounting concept anyway, whereas interest, lease payments, lease buyouts, and opportunity cost from tying money up in a physical asset rather than an investment are real numbers. Until you've sold the car you don't know how much it's depreciated.

At any rate, if it costs you $15k for a three year lease with a 30k buyout, that's a 45k car. If the loan costs you 42k total, there's that. If you pay cash for it, you'll never pay an interest payment, and car interest is pretty much always going to be higher than average investment earning, otherwise the loaner would invest the money in stocks or what have you rather than in car loans. If you change the car every three years, that's one cost. If you keep it 20, then your total cost is a bit higher (because you have to do maintenance and repair for years 4-20) but your cost per year is going to be a lot lower

I still think leasing is a mug's game intended for those who want a fancier car than they can afford.

[kwong7]

Originally Posted by DannyHobkins

2013 Model S is worth ~$12k private party, if you're going to drop $20k on a 60 mile battery upgrade, just get a newer Model S with 400 miles range for about $30k.

Yeah, it's tempting with all the other improvements on the newer Model S, but I really like what I have and the devil I know rather than the devil that I don't know. For instance, our Tesla does not have Autopilot, has free Supercharging, free connectivity, turn signal stalks, and can fit a full-sized wheel/tire in the frunk (from experience)

All new Model S have AP, no free charging/connectivity, can't fit a wheel/tire in the frunk, and doesn't have stalks. The known issues for my vintage is less efficient powertrain, coolant ingress to the stator/rotor & inverter at the drive unit due to seal failure, water ingress issues on the battery vents, and control arm links. The issues with the newer models are starting to present.

So for now, I'm committed to spending upwards of $30K to keep my car on the road with some improvements rather than trade up. It's less of an economical decision and more of a sustainability drive. Besides, I figure I paid 60% less than the previous owner and got 34% more use than they did out of it so far. I'm so thinking about dropping $3K into a better sound system since we road-trip in it a few times a year. 3-way front speakers, class D amp, DSP, a compact subwoofer, and tuning should make the trips a lot more enjoyable. I'll do the sound deadening and extra placement of weatherstripping myself.

[DannyHobkins]

Originally Posted by kwong7

Yeah, it's tempting with all the other improvements on the newer Model S, but I really like what I have and the devil I know rather than the devil that I don't know. For instance, our Tesla does not have Autopilot, has free Supercharging, free connectivity, turn signal stalks, and can fit a full-sized wheel/tire in the frunk (from experience)

All new Model S have AP, no free charging/connectivity, can't fit a wheel/tire in the frunk, and doesn't have stalks. The known issues for my vintage is less efficient powertrain, coolant ingress to the stator/rotor & inverter at the drive unit due to seal failure, water ingress issues on the battery vents, and control arm links. The issues with the newer models are starting to present.

So for now, I'm committed to spending upwards of $30K to keep my car on the road with some improvements rather than trade up. It's less of an economical decision and more of a sustainability drive. Besides, I figure I paid 60% less than the previous owner and got 34% more use than they did out of it so far. I'm so thinking about dropping $3K into a better sound system since we road-trip in it a few times a year. 3-way front speakers, class D amp, DSP, a compact subwoofer, and tuning should make the trips a lot more enjoyable. I'll do the sound deadening and extra placement of weatherstripping myself.

That's a good way to look at it. The Model S is the only Tesla interior that I personally like because its setup like a real car. Have to agree with you on the stalks and other parts too.

[b29510]

my company alway bought work trucks, 30 of them, now we lease though eneterprise, they pay everything we just buy fuel and send payment every month. if it breaks, they pay it, oil change, they pay it, tires, yes if it cant be fix, we swap out for new. its just a monthly payment.


with vehicle costing so much, its heading to a rental system, enterprise buy in bulk from factory

[rabbit33]

Originally Posted by b29510

my company alway bought work trucks, 30 of them, now we lease though eneterprise, they pay everything we just buy fuel and send payment every month. if it breaks, they pay it, oil change, they pay it, tires, yes if it cant be fix, we swap out for new. its just a monthly payment.


with vehicle costing so much, its heading to a rental system, enterprise buy in bulk from factory

Yes, commercial vehicles on a commercial lease is a perfectly valid way to do business. This isn't what we're talking about here.

Few private individuals have a situation where leasing is a better deal than buying a car - if you drive so few miles that you fit the private-use lease model, you don't need a new car every 3-4 years; if you drive so much that you'll wear out a car in 3-4 years, the excess mileage charges will knock your head off.

So I should have written "leasing a car for private use is generally a mug's game participated in by those who want a fancier car than they can afford".

[M3 Mitch]

Originally Posted by SouthSeasLifestyler

Thanks everyone. That does clarify for me the leasing thing. It is something that I never heard of downunder, so I wanted to clarify it, and to make sure I wasn't making a mistake by buying.

. I don't want to make any financial mistakes due to not understanding things here. There is so much I have to learn in such a short time, and everyone here has been so free with their knowledge and advice, so I seek it, and that requires me to provide details for context. So that is why I ask these questions, not to upset you or anyone else. Also, I am trying to see if we can manage here with just one car for a family of four. We care for the environment, too. Peace, mate!

SSLifestyler

Mastering the obvious, if you are in OZ, your market is different, your climate is different, etc. You are likely to get answers on here that are implicitly assuming you live in the States.

I'm pretty handy with cars, so I prefer to have a few older cars so if I'm working on one, I can just drive another one. Less depreciation as well. That might or might not work for you, I think your taxes and registration fees are higher on average there than the US.

[Dave 92 LSC]

I thought it is good for tax write offs ?
Not sure why would anyone want to loose 30k in 3 years and own nothing. Unless you can’t afford to buy a car in a first place.

[YourWakeUpCall]

Originally Posted by Dave 92 LSC

I thought it is good for tax write offs ?
Not sure why would anyone want to loose 30k in 3 years and own nothing. Unless you can’t afford to buy a car in a first place.

The value of the car after 3 years is precisely the same whether your lease, finance, or pay cash. The notion that you "own nothing" at the end of a lease is a common misconception.