AKA...too long didn't read but I got my sixteen thousand six hundred and ninth post so its all good
I guess I don't understand how you lose money when you lease. Your payments are low and every penny you put on the car after tax, goes toward paying the car off. Leasing has probably changed greatly over the years. When I bought my 2010 new I thought about buying vs leasing. Leasing to me was a no brainer. I kept my down payment, had ultra low payments, and had the piece of mind that if I get rear ended and have $10,000 worth of damage done and the car is now worth shit, I can just hand it back to them. The mileage doesn't scare me because I can just buy the car for what i still owe on it, or trade it in. Dealerships treat leases just like owning a car. What you still owe on the lease would be like what you still owe on your loan. Plus, no interest like you'd pay on a loan.If your are interested in a car like the GTI, new.....
The best value by far is to buy the car (after negotiating to a good price)....I've leased before but only when I didn't have the cash to buy....there is a reason why people in that situation lease but there is also a reason why this option is made available to those in bad cash positions...you will lose money overall....
I'm guessing that at about 3 years (I financed for 5 years at 1.9%) I break even and after that I continue to make a profit vs. leasing....
After 5 years I'll have a $13,000 car value with no debt.....well worth the additional $6,500 dollars that I'll spend in higher payments buying vs. leasing....
Also, if you drive a lot of miles....leasing is a disaster....the mileage charges will kill you....
I guess I don't understand how you lose money when you lease. Your payments are low and every penny you put on the car after tax, goes toward paying the car off. Leasing has probably changed greatly over the years. When I bought my 2010 new I thought about buying vs leasing. Leasing to me was a no brainer. I kept my down payment, had ultra low payments, and had the piece of mind that if I get rear ended and have $10,000 worth of damage done and the car is now worth shit, I can just hand it back to them. The mileage doesn't scare me because I can just buy the car for what i still owe on it, or trade it in. Dealerships treat leases just like owning a car. What you still owe on the lease would be like what you still owe on your loan. Plus, no interest like you'd pay on a loan.
Maybe you should really take a look at leasing options then. At the end of the lease I AM left with an asset, the car. It has depreciated, but my residual value has already been set. From there I can give the car back, (rarely the right answer) trade it in, (just like you could if you owned the car) or, buy it for exactly what you still owe on it. You set the price of the car in the beginning and basically rent to own, but only pay a percentage, paying no interest. I plan on buying my car after my lease in a year and I will owe $10,xxx. For that I will get a short lease and my payments will stay the same. Effectively I "bought the car" in the beginning, I just payed no interest.It really depends on what YOU value.
From a purely economic perspective buying that $900 Volvo at Auction, by FAR, is the best thing you can do. Car payments are terrible as that is capital that you are not investing into a return bearing account. At the end of four years he can sell that $900 volvo for $500 and buy another. $100 a year for a car, not bad. Worst case it sucks, its in the shop, he sells it early for $500 and tries again.
Also from an economic perspective the lease is the ABSOLUTE WORST. Unless you have a... creative... accountant there is no upside. You pay more, you don't actually own the car, yet you are responsible for it. At the end of the lease you are left with no asset for your investment. If the only way you can afford a car is via a lease, then you can't afford the car. Now if you get the lease for ease and can afford to be on a money losing position, constantly, then who cares? Generally, no one "should" lease.
The middle of the road is buying new. You take a hit on depreciation, but you have an asset that has real value at the end of the road.
So why do I pick the "middle of the road option?" Because the benefits I receive (enjoyment) out weigh the monetary costs. I keep the car 6-7 years, I have a nice trade value and cash on my pocket for the next one.
I dislike car payments, they are a terrible investment, but sometimes the return on them is not in dollars, but rather in something else.
Also from an economic perspective the lease is the ABSOLUTE WORST. Unless you have a... creative... accountant there is no upside. You pay more, you don't actually own the car, yet you are responsible for it. At the end of the lease you are left with no asset for your investment. If the only way you can afford a car is via a lease, then you can't afford the car. Now if you get the lease for ease and can afford to be on a money losing position, constantly, then who cares? Generally, no one "should" lease.
Maybe you should really take a look at leasing options then. At the end of the lease I AM left with an asset, the car. It has depreciated, but my residual value has already been set. From there I can give the car back, (rarely the right answer) trade it in, (just like you could if you owned the car) or, buy it for exactly what you still owe on it. You set the price of the car in the beginning and basically rent to own, but only pay a percentage, paying no interest. I plan on buying my car after my lease in a year and I will owe $10,xxx. For that I will get a short lease and my payments will stay the same. Effectively I "bought the car" in the beginning, I just payed no interest.
Middle of the road is not buying new. middle of the road is buying a car 2-4yrs old, not getting hit with major depreciation, getting it certified as well, then keeping that car 5-7 years, imho.
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Maybe you should really take a look at leasing options then. At the end of the lease I AM left with an asset, the car. It has depreciated, but my residual value has already been set. From there I can give the car back, (rarely the right answer) trade it in, (just like you could if you owned the car) or, buy it for exactly what you still owe on it. You set the price of the car in the beginning and basically rent to own, but only pay a percentage, paying no interest. I plan on buying my car after my lease in a year and I will owe $10,xxx. For that I will get a short lease and my payments will stay the same. Effectively I "bought the car" in the beginning, I just payed no interest.
From there I can give the car back, (rarely the right answer) trade it in, (just like you could if you owned the car) or, buy it for exactly what you still owe on it
Middle of the road is not buying new. middle of the road is buying a car 2-4yrs old, not getting hit with major depreciation, getting it certified as well, then keeping that car 5-7 years, imho.
I wouldn't say that is middle of the road right now, as in our current state of the car market.
2-4 year old cars are still over priced (many close to the price of new), interest rates on them are terrible compared to new and you are paying 2grand for a warranty you can hope to get 500 bucks out of.
You could easily end up paying about the same when you factor in interest on a 2 year old car vs a new one. Yes you will possibly have a little more to the warranty but to me CPOs are worthless.
You clearly have no idea what the definition of an "asset" is. At the end of a lease you are obligated to return that car. Under no circumstances in a lease do you build equity on the car (meaning in the event that you have to get rid of the car, you'd get money back).