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I know for a fact I won't want to be in whatever car I am in now in 2-3 years. So leasing means that I can pay nothing up front, pay a lesser monthly payment, and then in 3 years, if the car is worth more than the residual, trade it in, and if it's not, toss the keys back and wish them well. It's no lose for me. By not sinking a bunch of cash into an asset that is virtually guaranteed to depreciate, I free up cash for other things. I can get a much better rate of return on an investment than I can by sinking it into a car.
Boy. The there are some nosy obnoxious people you hang out with.
He's on to something, and it's not just his people.
I bought an older but well kept 2005 Audi A6 earlier this year ($10k @55k miles incl. 3 years mechanical insurance). It was about three or four thousand dollars cheaper than a slightly newer but higher mileage Toyota Aurion (in Australia/NZ, Aurion = Avalon, basically).
I can definitely relate to the stories that a loaded Camry/Avalon/Suburban would not make someone blink, but a little blue/white shield, 3-point star, or the four silver rings seems to evoke immediate speculation about finances and conjure horrific images of repair costs. I am rather angry at the first (my bank statements are none of your business), but I laugh at the second. The major service + a new wheel bearing was about $575 dollars.
If you had to save for your nice car for 13 years, you cannot afford it.
House has been paid off for seven years, kids have enough money in their 529s for college, retirement is on track, we are fully insured, we have an emergency fund, and employment is as secure as one could hope. We paid cash for the car, so we can DEFINITELY afford it, but thanks for your concern.
My point in recounting my story was simply to illustrate that if one continues to put a car payment aside after the loan is paid off, it can accumulate substantially. We didn't need to save that much for a new car, we just reaped the benefit of driving the old one for many years with few mechanical problems. We could have spent half of the money and had a perfectly serviceable replacement vehicle, but since all our other bases were covered, we decided to splurge.
Last edited by randomparent; 10-20-2015 at 09:20 AM..
Your numbers are off quite a bit... I can tell you that a base model Boxster/Cayman leases for $600 a month, with $6k due upfront, and it's only a 27 month lease. The Panamera 4 (which would be similarly priced to the Cayenne) starts at $1k per month, and you owe $7k upfront at signing.
"Middle" income people making above $80k could get approved to lease a Porsche. Lower income people do not get approved, at all. So if you're seeing some soccer mom in a Cayenne, they either have a used one and can afford it, or they have a new one and can afford it. You're not going to find any lower income people in Porsches unless it was given to them, or they bought a cheap used one.
Lease numbers vary depending on credit and terms. I had a relative that leased a Lexus for $700/month while I could probably get that for $400/month with good credit but that's how the game goes.
Sure, anyone with a decent paying job can afford a lease and that depends on your knowledge and appetite for debt management. The industry is setup to make it affordable.
Dave Ramsey is a bicycle with training wheels. He is very useful to many people who don't have the first effin' clue what they're doing. Many of his principles are good.
But he gives zero direction on how to leverage debt. Following his advice to the letter would literally cost me hundreds of thousands of dollars. But, hey, I'd be *debt-free*.
It is just for status. People like attention and like to have the status of owning a luxury car. You can drive in the hood and very poor neighborhoods and see 50K cars, just material status symbols for some to appear wealthy. It's silly and just materialism.
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