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My very experienced Tax Man / Accountant told me many years ago . . . "Leasing Is A Scam" that allows the "Financially Challenged" to drive more vehicle than they are able to afford.
Since that wise statement I have never leased a vehicle.
This is true, unless you actually can afford a nice vehicle so easily that you don't care about the financial hit AND like the perks of having a newer vehicle with newer technology every few years.
Realistically, I had to own my car 8+ years before I break even with money I would've spent on a lease instead. Coincidentally, that's right now. And what do I have? An older car and the desire to buy newer. A lot of people buy/finance new cars every 5 years, so it doesn't even work out that much better for them.
In a good year, I drive 18K. On a busy year, I drive 26-30. A lease would cost me a fortune! The dealership did the math when I bought my Durango and the lease was significantly higher than my payments. And I will also own my Durango in a couple years. If I leased it, I would owe them even more money and not have a vehicle. No thanks.
So I'm shocked to hear that leasing works for me and not for others. Shocked, I tell you.
A better question is why would you want to own a Durango with that many miles on it 3-5 years?
You're missing something huge.....at the end of the payments which you can pay off early and save money, you OWN the vehicle. It's yours! At the end of a lease, you own the paperwork that says you had a lease. You don't own a vehicle. You don't have a car. You have paperwork....Wahooo!!!
Yes, in the end of the loan term (or earlier) you would own it, because you paid for it in full. In a lease, you pay just for depreciation (well plus interest and such), of course you are not going to own the car in the end!
For people who always want to drive new (say each 3 years to be specific) lease (vs buy and sell after 3 years) often makes more sense. On many cars lease residuals are often inflated, so roughly speaking you would pay less than the real depreciation (which would be the amount of the loss in the buy and sell scenario). This becomes even more true on heavily optioned cars, since the options loose value more quickly than the base sort to speak.
Now, if you keep your car for a long time, that's a different story
I love those low monthly lease payments. Until I take the down payment they want and divide by 36 and add that into the monthly payment. That's when I see a lease is just as expensive as buying.
Why shouldn't it be? In fact, it's reasonable argument that leasing should be MORE expensive than purchasing because you're getting the flexibility of getting a new vehicle every 2-3 years, the advantage of never having a vehicle that is out of warranty, etc.
I've done both leasing and purchases. Depends on my personal needs and finances. One is not inherently superior to the other.
And if you turn your lease in at the end of three years with 20,000 miles on it, will they reimburse you for the 16,000 miles you didn't use? I think I already know the answer to that one.
You might have equity in the car though if the residuals weren't jacked up and you are considerably under on mileage. You can sell the car for more than you owe on it.
You're missing something huge.....at the end of the payments which you can pay off early and save money, you OWN the vehicle. It's yours! At the end of a lease, you own the paperwork that says you had a lease. You don't own a vehicle. You don't have a car. You have paperwork....Wahooo!!!
Maybe nobody told u but at lease end you have the option to buy the car if you really like it and may even get a better deal on it if your residual is lower than the actual value. Sssshhhh don't let the secret out!
So I'm shocked to hear that leasing works for me and not for others. Shocked, I tell you.
A better question is why would you want to own a Durango with that many miles on it 3-5 years?
Because I'm a weirdo who doesn't need a brand new vehicle every 3 years. It's just getting broken in at 3 years! Brace yourself....I've regularly driven vehicles 10+ years old. I drive them until the monthly repairs start becoming close to a car payment.
It's amazing how sarcasm just oozes out of you like sweat in a plumber's crack!
Maybe nobody told u but at lease end you have the option to buy the car if you really like it and may even get a better deal on it if your residual is lower than the actual value. Sssshhhh don't let the secret out!
Thanks Captain Obvious! What would the world do with Captain Obvious?
And who actually pays sticker when they purchase a vehicle? I never have.
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