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Most luxury cars are leased and in my opinion I wouldn't pay 30k for a car unless I had plenty of disposal income.
I know leases are despised around here, but at least for the guy who is living above his means, a lease provides a relatively simple out. They go out and lease their dream car or a car to impress and after a year, after the novelty of the new car wears off, they realize that the payment is a huge burden. Well, at the very least it will be over in in one or two years after the honeymoon perid and hopefully they learned their lesson. Of course, some don't, but some will.
I know leases are despised around here, but at least for the guy who is living above his means, a lease provides a relatively simple out. They go out and lease their dream car or a car to impress and after a year, after the novelty of the new car wears off, they realize that the payment is a huge burden. Well, at the very least it will be over in in one or two years after the honeymoon perid and hopefully they learned their lesson. Of course, some don't, but some will.
Leasing a car makes sense if you just REALLY have to drive a certain kind of car, don't have or don't want to shell out the up-front cash to pay for it outright, and are determined to replace it with another new car every 2-3 years. It is certainly better than rolling over your previous car debt into another new car. I had a friend that just HAD to have a new Mustang every 2 or 3 years. By his 3rd Mustang I think he was paying out 8-900 bucks.
If you don't have much to put on a down-payment, the only way you would NOT have a $500 payment on a new car is to stretch the payments out 84 months.
Or lease a relatively affordable vehicle for 2-3 years, and then buy it out at the end (with the added "benefit" of not HAVING to buy it out if your financial situation worsens). Of course, you're paying more interest this way, but the simple fact is that the amount of the monthly payment is a huge thing for a lot of people because most people only have so much money at any one time they can apportion to certain things like car.
Lol. I wrote this post before reading your reply to my other post where you talk about the limited situations in which you should lease. I probably have a much rosier picture of leasing than most because (1) my father owned his own company most of my life and leased vehicles as it was a company expense, (2) I leased a car during grad school (my first new car, a Honda Civic) because I had to have very low payments -- and everything went great - I had low payments, I had a reliable car, and (3) I purchased my current car (a Honda Accord which is now 13 years old) right after school via a lease and then a buyout, which helped payments stay low while I was getting started out.
Basically, I've never had bad experiences with leasing, and I've never used leasing to drive some grand, luxury, otherwise-could-not-afford vehicle. So, my perception is a bit skewed as to leasing.
Last edited by goillini8; 06-29-2016 at 03:12 PM..
I still don't get why people think they even need a truck or SUV in the first place - even a non-luxury one is a "luxury" in the sense that a compact car can do just as well if the only need is to get from point "a" to point "b".
For most people, you are right. An SUV or crossover has become the new new station wagon - a vehicle to put a bunch of kids in & take them someplace. A minivan is both a less expensive and more practical choice.
I use my SUV for everything from towing a horse trailer to towing a trailer with snowmobiles to just tossing skis in the back & driving the 5 minutes to the ski resort parking lot. It is definitely convenient making trips to Home Depot; I can toss 2x4s and sheets of plywood in the back, as well as large shrubs from their landscaping area. With some ramps, I can stow rental equipment such as a walk-behind concrete grinder or specialty power washer in the back of my SUV.
I still don't get why people think they even need a truck or SUV in the first place - even a non-luxury one is a "luxury" in the sense that a compact car can do just as well if the only need is to get from point "a" to point "b".
In this case, governmental regulation provides some perverse incentives.
After the 1973 Arab Oil Embargo, the US Government implemented standards for CAFE: the "Corporate Average Fuel Economy." It has been revised several times, with ever-stricter requirements.
The Government, in Its Wisdom, set CAFE standards for "passenger vehicles" that were different from those of "light trucks." SUVs and crossovers count as trucks.
So, to take a real world example, the Dodge Neon and the Chrysler PT Cruiser were built on the same platform - the only real differences were cosmetic (body and trim). Oh - the Dodge Neon was classified by NHTSA as a "passenger vehicle" while the PT Cruiser was classified as a "light truck" for CAFE purposes.
The minimum fleet average for passenger vehicles such as the Neon was 27.5 mpg CAFE, while for light trucks such as the PT Cruiser it was 20.7 mpg CAFE. A small, four-cylinder vehicle like the PT Cruiser was effectively a “ringer” for Chrysler’s light fleet average.
This is one reason why we see more trucks and SUVs being used as passenger vehicles: by gaming the system to make something a "light truck," the mainstream manufacturers merely need to meet the less stringent truck CAFE standard.
This is why we don't see station wagons any more: they would be "passenger vehicles" and would have to meet the more rigorous standard.
By 2006, CAFE was adjusted once again -- this time for its 2011 fuel economy targets, by calculating a vehicle’s “footprint”, which is the vehicle’s wheelbase multiplied by its wheel track, measured in square feet. Fuel economy targets are now a function of a vehicle’s footprint: the smaller the footprint, the tougher the standards are. A car such as the Honda Fit, with its footprint of 40 square feet, has to achieve 61 mpg CAFE by 2025 to comply with regulations. At the opposite end of the spectrum, a full-size truck like the Ford F-150, with a footprint of 75 square feet, only needs to hit 30 mpg CAFE by 2025.
As an aside, the calculations for mpg under CAFE are different from the calculations printed on the new car's "window sticker." Actually, everything about CAFE is different from the real world. CAFE standards for 2025 are in binder containing -- wait for it -- one thousand nine hundred forty four pages. Yes, that's 1944 pages of regulations to implement CAFE.
The new regulations, rather than encouraging auto makers to strive for unprecedented fuel economy in their passenger car offerings, has incentivized auto makers to build larger cars, in particular, more car-based crossovers that can be classified as “light trucks” and used to skew fleet average figures, much the same way the PT Cruiser did. Full-size trucks have become a “protected class”, safe from the most aggressive targets, while compact trucks have become nearly extinct as a result.
As I have posted many times very foolish waste of money which causes hardship.
At present I have a 99 Tacoma SR5 in excellent condition with 205.000 which replaced my 86 extra-cab with 286.000 which replaced my 77 Celica with around 90,000,collectively they cost $31,000.
I always paid cash.
I flirted with Outbacks for years but they do not have the securable cargo space I need. What size of trailer have you hauled long distance or on vacation?
I don't own a Subaru, but the specs say MAXIMUM 3,000 pounds. That isn't much.
With that vehicle, I wouldn't tow without an aftermarket transmission oil cooler. But I always err on the side of caution.
Or lease a relatively affordable vehicle for 2-3 years, and then buy it out at the end (with the added "benefit" of not HAVING to buy it out if your financial situation worsens). Of course, you're paying more interest this way, but the simple fact is that the amount of the monthly payment is a huge thing for a lot of people because most people only have so much money at any one time they can apportion to certain things like car.
Lol. I wrote this post before reading your reply to my other post where you talk about the limited situations in which you should lease. I probably have a much rosier picture of leasing than most because (1) my father owned his own company most of my life and leased vehicles as it was a company expense, (2) I leased a car during grad school (my first new car, a Honda Civic) because I had to have very low payments -- and everything went great - I had low payments, I had a reliable car, and (3) I purchased my current car (a Honda Accord which is now 13 years old) right after school via a lease and then a buyout, which helped payments stay low while I was getting started out.
Basically, I've never had bad experiences with leasing, and I've never used leasing to drive some grand, luxury, otherwise-could-not-afford vehicle. So, my perception is a bit skewed as to leasing.
I don't get the argument about company leasing for the tax deduction, since even if the company buys the cars it can deduct depreciation expense, directly or as part of mileage cost. Either there is something else going on, or someone simply doesn't understand the tax laws or the finances well enough. Incidentally I'm in grad school too but I couldn't afford to lease or finance a car at all without negative cash flow. I paid cash for a nearly-new econobox under warranty, and don't feel like I'm hemorrhaging money.
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