patrick.net

Peter P says

Is that a Firefly reference?

One of Dan's favorites

dublin hillz says

SFace says

edvard2 says

not the trade-in equity you are using as a reason.

There is no equity. At the end of lease term, no car, no money. If anything, there may be more payments to send the car back to the lessor because of convenent..

Exactly, how can someone who leases cars claim any "equity"? Equity belongs to someone who has ownership rights to a vehicle and can trade it in/sell it for fair market value. The person who leases however is a basically a renter, hence no equity!

Equity, no. Saving money over buying and losses due to depreciation and maintenance yes.

New Renter says

dublin hillz says

SFace says

edvard2 says

not the trade-in equity you are using as a reason.

There is no equity. At the end of lease term, no car, no money. If anything, there may be more payments to send the car back to the lessor because of convenent..

Exactly, how can someone who leases cars claim any "equity"? Equity belongs to someone who has ownership rights to a vehicle and can trade it in/sell it for fair market value. The person who leases however is a basically a renter, hence no equity!

Equity, no. Saving money over buying and losses due to depreciation and maintenance yes.

My understanding is that leasing is only beneficial if and only if a customer insists on having a new car every four years and does not go over or significantly under the mileage restrictions that are associated with the lease terms. Additionally the leasee would have to take care of basic maintenance and ensure that interior is not damaged via issues such as kids and pets. If the customer however were OK to have the car over a 4 year period, owning is advantageous and the longer the subject owns that car the more advantageous it is.

bob2356 says

That being said I agree cars are light years better. EFI is the biggest winner. I was totally amazed with my 5.0 mustang. It just started and run perfectly every time. Carbs were always crude and ragged running at best. Getting rid of ancient pushrod engines was second. Today's ohc engines are like sewing machines rather than farm tractors. The huge push to minimize NVH (noise, vibration, harshness) in the 90's was third. The 2 generations difference between my 89 e32 bmw and my wife's 98 e39 bmw is just amazing. So much smoother and refined it's hard to believe.

I'll agree with EFI and add electronic ignition.

I will disagree on pushrods though. I used to believe that until a friend of mine, a former mechanic, convinced me otherwise:

http://en.wikipedia.org/wiki/GM_LS_engine

GM's LS engine series is a modern pushrod V8 which in the Corvette can produce 350+ HP and 350+ ft-lbs torque yet still achieve 30 MPG highway when driven judiciously.

http://www.youtube.com/embed/AtPwnsyGTxw

Add in cylinder deactivation, regenerative braking, electric steering and electric A/C and you can push those numbers even higher.

People here are determined not to listen. Keep losing money As long as I make the payments, the car is mine. The equity is mine.

Which is why I have over $13k equity in my lease and my payoff balance is

is $10k on a $23k car.

Don't listen drop $20k cash and sit on the same car for 25 years until it depreciates to ZERO at which time you will buy a new car.

There is a substantial benefit to leasing and that is if you own a business, you can write off the lease. I don't believe you can do this with a purchased car. On a $350/month lease, that could be as much as $80/month. Also, many here forgot the money is tied up so there is opportunity cost on paying cash for a used car.

Unless you buy a beater, I don't think that it's that much better to buy a lesser priced used car than a brand new car you lease. The monthly nut, even after depreciation, brakes, tires, etc is about the same.

OP, reading the original post, it's clear that you view automobiles as a functional tool that gets you from a to b. My father shares your sentiments.

On the flip side... I'm an engineer and a car guy, it's in my blood. I see cars as art. I enjoy tinkering with them, modifying them, and comparing their performance. I perform all my own work on them. Nothing puts a smile on my face like mashing the go-pedal in a powerful V8 and getting firmly planted in my seat or taking a corner while on the brink of the tires letting go.

I will say that despite my adoration for cars, I'm still financially minded and have never (and don't expect ever - never say never right?) bought a new car new off the show-room floor. It's simply too much of a liability to consider. When a car loses 1/2 it's value after just 4 years, I'm not going to be jumping at the chance to have the latest greatest. At the same time, there are a lot of cool 4 year old cars out there to choose from, many that can still be purchased with warranty.

I have friends that gain energy and derive pleasure from wrist watches, some from computers, some from fashion, some from working out at the gym, some from cars...

If you think of cars strictly from a practical stand-point, you will never understand car culture and the pleasure derived by car enthusiasts.

Also, don't be fooled. There are a lot of $15-25K BMWs out there (few years old) that give the impression to the mainstream viewer that a $50-60K car just went by. Case and point. We have a 15yr old E-class Mercedes in the family. It's a 3rd car so never really gets used. I drove it to the office one day and one of the assistants here says to me, "Was it you who was driving that Benz into the office today." I looked at her puzzled considering that there wasn't a single Camry/Accord in the lot that was worth less.

But there is some truth to maintenance costs. Whether you own a 2012 $75K Benz or a 1997 $7K Benz, the maintenance costs aren't far off. You may have heard the saying, "Many can afford to buy a Ferrari, but very few can afford to own a Ferrari." With $3500 brake jobs, they aign't kidding.

Also, what you drive or how you dress does make an impression. And not only to attract the opposite sex. If I drove a $1000 Hyundai into the office as someone who makes decent money, I expect that my judgement and decision making would be called into question. Of course beyond the first impression it matters less and less, but 1st impressions can last and be tough to break.

Waitingtobuy says

There is a substantial benefit to leasing and that is if you own a business, you can write off the lease. I don't believe you can do this with a purchased car. On a $350/month lease, that could be as much as $80/month. Also, many here forgot the money is tied up so there is opportunity cost on paying cash for a used car.

Of course, I have now said what you have posted more than three times, no one is listening.

Even though what you and I have said is accurate there will be people who think dropping $20K balloon on two beaters and owning them for 25years is better than getting a new care every 3 years at no cost.

Thedaytoday says

Even though what you and I have said is accurate there will be people who think dropping $20K balloon on two beaters and owning them for 25years is better than getting a new care every 3 years at no cost.

Except in the end I have more money in my pocket, that's all.

SFace says

Waitingtobuy says

There is a substantial benefit to leasing and that is if you own a business, you

can write off the lease. I don't believe you can do this with a purchased car

You can write off the car. In fact, with bonus depreciation, heavy vehicle enhancement or whatever, you can write off most of the car in Dec. While you get 450 in deduction a month, the buyer gets something like 47K right away.

Not necessarily:
There's also the price of the car to consider. The IRS' luxury auto tax rules limit depreciation write-off for the portion of the car's price that is in excess of $17,000 for the first few years of use. In other words, a new Rolls Royce and a Saturn will receive the same depreciation," says Stephen Nelson, who heads a Washington-based tax firm. "They're not going to let you tool around in your Silver Cloud and use tax law to subsidize it."

http://smallbusiness.blogs.cnnmoney.cnn.com/2008/06/10/can-i-write-off-my-personal-car/

As for a buying a beater and driving for 25 years, you may be right. The average person probably holds on to their purchased car for 7-8 years. The cost for buying a new car is the most with its financing and all sales tax upfront, followed I believe by a lease and buying a 2-3 yr old used car.

I'm not putting my wife and young daughters in a 25 yr old car. Too much at stake for me.

It isn't an either or proposition. The OP talked about Bimmers, SUVs, etc. I prefer a nice $26-$28K new leased car and saving for retirement and college education over a Range Rover any day.

Peter P says

Also, it is important to have at least 200 lb-ft of torque available at low rpm for merging and passing.

Torque by itself in no way describes passing ability. In order for that torque to have any meaning, you have to combine it with time, or effectively RPM (Once you do that it's called horsepower). For a more complete picture you want to also know the mass and gearing of the car.

Horsepower describes passing ability, not torque.

Horsepower = Torque x rpm/5252

A 30k car may not be much cheaper to lease than a 40k car. Plug in some numbers and you will be surprised.

I think the best thing to do is to buy a new car outright (save up for it so there won't be any need to finance) and ride it as long as possible. Honda accords are very reliable - should make 300,000 miles no problem as long as you do proper maintenance as scheduled. Hypothetically, if you use it for 12 years and assuming that you paid $30000 for it, the monthly cost would be $30,000/144 = $208 per month. And it will still have some resale value. I doubt you can get a better deal via constant leasing over a 12 year period and best thing about owning - no B.S. miles restrictions, no need to watch the odometer.

they are worth the money IMO. nothing look better than BMW and Benz. i think Porsches and Toyota's/Scion's are ugly, however. i would never drive one even free.

the body design of a BMW 335i coupe alone is worth like $50K. (maybe because I own one).

chanakya4773 says

No cell phone, TV, Restaurant food, games, movies , parks ...etc since all these
are purely emotional needs.

Without any entertainment at all, pretty soon absenteeism will increase at work not to mention alcoholism. Soviet union was a testament to that.

@Thedaytoday, I just finished reading this entire thread and either you are making some off the wall personal assumptions, making up your own reference points, know some uncommon tax loop-hole, committing tax fraud, or just plane insane.

I've never heard anyone talk about "building" equity with a leased car (that only depreciates) and must be returned to it's rightful owner at the conclusion of the lease. Unless the dealership is willing to sell you the car for less than they are willing to buy it back from you at the conclusion of the lease, which would mean they are as insane as you.

And rather than arguing and name calling, why not explain how you are doing it and earn your gold star. Otherwise, poof, be gone. No sense it just posting the same one liner over and over.

Well whats the fucking point of working hard and going to college if u cant buy nice bling?

If everyone had the attitude of the OP our entire economy would collapse.

You are what you drive. Retire early!? Why so you can hoard cats? Keep
Working man!

PockyClipsNow says

Well whats the fucking point of working hard and going to college if u cant buy nice bling?

If everyone had the attitude of the OP our entire economy would collapse.

You are what you drive. Retire early!? Why so you can hoard cats? Keep

Working man!

Well put.

And the only reason I would ever want to "retire early" is so that I can "work" on other business ventures that I enjoy more than my current day job (without having to worry about whether those ventures will pay my bills).

PockyClipsNow says

Well whats the fucking point of working hard and going to college if u cant buy nice bling?

If everyone had the attitude of the OP our entire economy would collapse.

You are what you drive. Retire early!? Why so you can hoard cats? Keep
Working man!

With cars it all about value for me. For instance, I consider honda accord to be a better value vs either BMW or Kai Rio for that matter. The car that I currently own I bought new. Sure beats the hand me down beater mistubishi that I got as a hand me down college graduation present. Having been exposed to both of these scenarios, I don't think I will ever buy used or lease anything.

edvard2 says

Thedaytoday says

Even though what you and I have said is accurate there will be people who think dropping $20K balloon on two beaters and owning them for 25years is better than getting a new care every 3 years at no cost.

Except in the end I have more money in my pocket, that's all.

Idiot, you don't the same equity, the balloon payment of $21k is GONE! You have lost your entire investment. Wow, you are stupid.

While I retain over $13k in equity with zero down and I still have the $23k in the bank instead of putting it down and losing it!

Edvard, your a foolish idiot. Start to listen or stop posting drivel.

dublin hillz says

think the best thing to do is to buy a new car outright

Your an idiot.

BayArea says

I've never heard anyone talk about "building" equity with a leased car (that only depreciates) and must be returned to it's rightful owner at the conclusion of the lease. Unless the dealership is willing to sell you the car for less than they are willing to buy it back from you at the conclusion of the lease, which would mean they are as insane as you.

NO NO NO!!!!! NO!

Seriously you guys are stupid

You have no idea what you are saying.

Which is why you have never leased a vehicle.

dublin hillz says

PockyClipsNow says

Well whats the fucking point of working hard and going to college if u cant buy nice bling?

If everyone had the attitude of the OP our entire economy would collapse.

You are what you drive. Retire early!? Why so you can hoard cats? Keep

Working man!

With cars it all about value for me. For instance, I consider honda accord to be a better value vs either BMW or Kai Rio for that matter. The car that I currently own I bought new. Sure beats the hand me down beater mistubishi that I got as a hand me down college graduation present. Having been exposed to both of these scenarios, I don't think I will ever buy used or lease anything.

I'm trying really hard but I can't see the point you are making here. At least not any well defended point.

The only person here who seems to get it is Peter.

Peter these fools have no clue how to use the US tax system.

Thedaytoday says

BayArea says

I've never heard anyone talk about "building" equity with a leased car (that only depreciates) and must be returned to it's rightful owner at the conclusion of the lease. Unless the dealership is willing to sell you the car for less than they are willing to buy it back from you at the conclusion of the lease, which would mean they are as insane as you.

NO NO NO!!!!! NO!

Seriously you guys are stupid

You have no idea what you are saying.

Which is why you have never leased a vehicle.

Stupid I'm not, but inexperienced in leasing vehicles I certainly am.

1.) What's the MSRP on you your last vehicle lease?
2.) What price did you agree to?
3.) You said your monthly payment is $250
4.) You said $0 down
5.) What's the duration of the lease?
6.) What will the car be worth at the conclusion of the lease roughly?
7.) What happens next?

8.) How are you using the US tax system to your advantage here?

Simple :-)

I am a fool too.

The system is also very complex. And if somone wants to drive old cars it is respectable too.

building "equity" with a leased car? oh new stuff now i am going to seriously read this thread from start to finish.

Car A cost $23k
$250 pm
Sold 3yr later $21k
Equity $6k ish after taxes

Car B cost $23k minus the roll over equity from trade (cost $17k)
$250PM
Sold 3yr later $21k

equity $12K ish

and on it goes.

Car C cost $21k got a $2k discount - trade in (got $12k equity towards) = cost $9k ish

$250PM

My credit is also now through the roof using this method.

ZERO DOWN ON ALL 3 CARS!

That's $7500 in my pocket people.

Did I say I get a new car to drive every36mos with no maintenance costs as well.

Mark D says

building "equity" with a leased car? oh new stuff now i am going to seriously read this thread from start to finish.

Don't bother, you and everyone else in this thread seems to be at the same point whether you read it or not.

PockyClipsNow says

Retire early!? Why so you can hoard cats?

Yes retire early in your 40s and meditate, hike in the mountains, ski,snowboard, surf, make music etc. and bone hot girls, no bling needed. The things you own end up owning you. But thank you for saving the economy ;)

edvard2 says

Most luxury cars brands with the exception of the Japanese makes are fairly unreliable and failure-prone.

Lincolns, Cadillac, and Buick's are reliable (as is my Oldsmobile).

PockyClipsNow says

Why so you can hoard cats?

Of course!

Obligatory:

So let's get this straight you drop over $20k cash on two cars, 20 years later they are now worthless. Great investment.

Yes, they still run. Congrats, your cars in 10 years will be crushed if not sooner.

By which time you will drop another $20k+ cash on two new cars.

That's now a 40k loss.

My 20K cash is still liquid , and growing. yours is not, yours is a total loss

I would also like to point out you EDVARD are not the average car owner! If you maintain it yourself you are in the 0.5% of people who do.

The rest get fucked and lose thousands as soon as they drive them off the lot.

I can show you how to make money off the lot.

I have owned 100's of cars.

From what I am beginning to understand, Thedaytoday would want us to read this to further our financial education:

http://www.edmunds.com/car-leasing/3-ways-to-turn-your-lease-into-cash.html
Leverage the Equity in Your Leased Car
Rising used-car prices mean that dealers will sometimes buy out a consumer's lease and pay him for the equity in the car.

chanakya4773 says

still don't understand how on earth leasing is better than buying.

Your 7% figure is high. Also, I would assume higher insurance costs would be incurred with a lease (full coverage on a new car is going to cost way more than liability only insurance in an old car). 6K maintenance on a car over a period of 20 years sounds low to me. Assuming a low fixed lease rate over 20 years seems a bit optimistic as well.

Stock market dont return 7% anymore thats pre 911, now were in zirp. Its sideways.

chanakya4773 says

I still don't understand how on earth leasing is better than buying.

That's because you have never leased a vehicle. You also would not lease the same car for 20 Years!!!! Obvious to most people.

It's about down payment, residual and new purchase price. If you see the upside on all 3 expect to make out like bandit like me.

Your examples make no sense, you analogy comparing it to a stock market investment, MAKES NO SENSE.

So to recap A) Down Payment B) Purchase Price C) Residual

For the record a Nissan Maxima would not have a high enough residual after 36 mos to do this.

In your example where do you TRADE!!!! for a new car? Where is the residual equity?

chanakya4773 says

EXAMPLE:

person 1 : leases nissan maxima 3.5 every three years at $280/per month. He does this for 20 years.

Person 2 : Buys nissan maxima 3.5 at 30K and keeps it for 20 years

costs after 20 years :

person 1 = 20 (years) * 12 ( months) * 280 = 67.2 K

person 2 = 30 K + maintenance = 30K + 6K = 36 K

Incorrect. Math is not your strong point.

chanakya4773 says

ets assume you have 1.5 K residual after 3 years,.

No, lets not. That's shit. $1.5k residual is a joke.

I avg. about $6k every 36 Mos.

chanakya4773 says

There is a reason you are not showing YOUR MATH because its obviously flawed. i think your drank the sales man's "lease it" kool aid.

are you serious, read the fucking thread fukwit!

chanakya4773 says

There is a reason you are not showing YOUR MATH because its obviously flawed. i think your drank the sales man's "lease it" kool aid.

You have never leased and it shows. I have leased over 20 company cars at a time for over a decade .

shut the fuck up.